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supply (p. 490) open opportunity n. the ability of everyone to enter and compete in the market of his or her own free choice (p. 73) operating budget n. a plan for day-to-day expenses (p. 436) opportunity cost n. the value of something that is given up by choosing one alternative over another (p. 14) option n. a contract giving an investor the right to buy or sell stock at a future date at a preset price (p. 333) outsourcing n. the practice of contracting with an outside company, often in a foreign country, to provide goods or services (p. 269) overdraft n. a check or other withdrawal that exceeds the existing account balance (p. 576) P par value n. the amount that a bond issuer promises to pay the buyer at maturity (p. 338) partnership n. a business co-owned by two or more people, or “partners,” who agree on how responsibilities, proﬁ ts, and losses should be divided (p. 232) patent n. a legal registration of an invention or a process that gives the inventor the exclusive property rights to that invention or process for a certain number of years (p. 202) peak n. the end of an expansion in the economy (p. 359); see business cycle per capita gross domestic product n. a nation’s GDP divided by its total population (p. 546) perestroika n. Russian leader Mikhail Gorbachev’s plan to gradually incorporate markets into the Soviet Union’s command economy (p. 564) perfect competition n. the ideal model of a market economy; the market structure in which none of the many well-informed and independent sellers or buyers has control over the price of a standardized good or service (p. 192) personal income (PI) n. the annual income received by a country’s people from all sources (p. 355) phishing n. technique used by identity thieves to gather personal information through deceptive telephone calls (p. 588) PIN n. personal identiﬁ cation number (p. 577) positive economics n. a way of describing and explaining economics as it is (p. 29) positive externality n. an externality that beneﬁ ts people who were not involved in the original economic activity (p. 87) poverty n. the situation in which a person’s income and
resources do not allow him or her to achieve a minimum standard of living (p. 388) poverty line see poverty threshold poverty rate n. the percentage of people living in households that have incomes below the poverty threshold (p. 389) poverty threshold n. the ofﬁ cial minimum income needed to pay for the basic expenses of living (p. 388) predatory pricing n. the setting of prices below cost for a time to drive smaller competitors out of a market (p. 216) preferred stock n. a share of ownership in a corporation giving the holder a share of proﬁ ts but, in general, no voting rights (p. 331) premium n. an amount paid for insurance (p. 596) R40 Glossary G l o s s a r y price ceiling n. an established maximum price that sellers may charge for a product (p. 180) price ﬁ xing n. conspiring among or between businesses to set the prices of competing products (p. 216) price ﬂ oor n. an established minimum price that buyers must pay for a product (p. 182) proﬁ t motive n. the incentive that encourages people and organizations to improve their material well-being by seeking to gain from economic activities (p. 73) progressive tax n. a tax that places a higher percentage rate of taxation on high-income earners than on low-income earners (p. 412) price maker n. a business that does not have to consider competitors when setting its prices (p. 198) price taker n. a ﬁ rm that must accept the market price set by the interaction of supply and demand (p. 193) primary market n. a market for buying newly created ﬁ nancial assets directly from the issuing entity (p. 322) prime rate n. the interest rate that banks charge their best customers (p. 491) private company n. a corporation that controls who can buy or sell its stock (p. 238) private property rights n. the rights of individuals and groups to own resources and businesses (p. 48) private sector n. the part of the economy that is owned by individuals or businesses (p. 432) privatization n. the process of transferring state-owned property and businesses to individuals (p. 563) privatize v. to change from government or public ownership to private ownership (p. 61) producer n. a person who makes goods or provides services (p. 5) producer price index
(PPI) n. a measure of changes in wholesale prices (p. 397) product differentiation n. the attempt to distinguish a product from similar products (p. 206) product market n. the market in which goods and services are bought and sold (p. 52) production possibilities curve (PPC) n. a graph used to illustrate the impact of scarcity on an economy (p. 18) productivity n. the amount of output produced from a set amount of inputs (p. 372) productivity, labor see labor productivity proﬁ t n. the ﬁ nancial gain a seller makes from a business transaction (p. 49); the money left over after the costs of producing a product are subtracted from the income gained by selling that product (p. 78) proﬁ t-maximizing output n. the point in production at which a business has reached its highest level of proﬁ t (p. 143) property tax n. a tax based on the value of an individual’s or a business’s assets (p. 412) proportional tax n. a tax that takes the same percentage of income from all taxpayers regardless of income level (p. 412) protectionism n. the use of trade barriers between nations to protect domestic industries (p. 523) protective tariff n. a tax on imported goods to protect domestic goods (p. 521) public company n. a corporation that issues stock that can be freely traded (p. 238) public disclosure n. a policy requiring businesses to reveal product information to consumers (p. 217) public goods n. goods and services provided by the government and consumed by the public as a group (p. 84) public transfer payment n. a transfer payment in which the government transfers income from taxpayers to recipients who do not provide anything in return (p. 89) pure competition see perfect competition Q quota n. a limit on the amount of a product that can be imported (p. 520) R rational expectations theory n. the theory that states that individuals and business ﬁ rms expect changes in ﬁ scal policy will have particular effects and take action to protect their interests against those effects (p. 452) rationing n. a system in which the government allocates goods and services using factors other than price (p. 183) real GDP n. the gross domestic product corrected for changes in prices from year to year (p. 352) real GDP per capita n. the real gross
domestic product divided by total population (p. 369) recession n. a prolonged economic contraction lasting two or more quarters (six months or more) (p. 359) regressive tax n. a tax that takes a larger percentage of income from low-income earners than from high-income earners (p. 412) Glossary R41 regulation n. a set of rules or laws designed to control business behavior (pp. 150, 214) Social Security n. a federal program to aid older citizens, orphaned children, and the disabled (p. 423) representative money n. paper money that is backed by something tangible (p. 291) sole proprietorship n. a business owned and controlled by one person (p. 226) required reserve ratio (RRR) n. the fraction of a bank’s deposits, determined by the Federal Reserve, that it must keep in reserve so that it can loan out money (p. 484) return n. the proﬁ t or loss made on an investment (p. 327) revenue n. government income from taxes and nontax sources (p. 410) revenue tariff n. a tax on imports speciﬁ cally to raise money; are rarely used today (p. 521) right-to-work laws n. legislation that makes it illegal to require workers to join unions (p. 279) risk n. the possibility for loss on an investment (p. 327) S safety net n. government programs designed to protect people from economic hardships (p. 89) sales tax n. a tax based on the value of goods or services at the time of sale (p. 412) savings n. income not used for consumption (p. 318) scarcity n. a situation that exists when there are not enough resources to meet human wants (p. 4) seasonal unemployment n. unemployment linked to seasonal work (p. 384) secondary market n. a market in which ﬁ nancial assets are resold (p. 322) service n. work that one person does for another for payment (p. 5) shadow economy see underground economy share n. part of the stock of a corporation (p. 238); see stock shock therapy n. an economic program involving the abrupt shift from a command economy to a free-market economy (p. 563) shortage n. a situation in which demand is greater than supply, usually the result of prices being set too low (p. 167) shoulder surﬁ ng n.
technique used by identity thieves to gather personal information as you disclose private information in public (p. 588) spamming n. technique used by identity thieves to gather personal information through deceptive e-mails (p. 588) special economic zone (SEZ) n. a geographic region that has economic laws that are different from a country’s usual economic laws, with the goal of increasing foreign investment (p. 567) specialization n. a situation that occurs when individuals or businesses concentrate their efforts in the areas in which they have an advantage for increased productivity and proﬁ t (pp. 50, 138, 510) spending multiplier effect n. a situation in which a small change in spending eventually results in a much larger change in GDP (p. 455) stabilization programs n. programs that require troubled nations to carry out reforms such as reducing foreign trade deﬁ cits and external debt, eliminating price controls, closing inefﬁ cient public enterprises, and slashing budget deﬁ cits (p. 559) stagﬂ ation n. a period during which prices rise at the same time that there is a slowdown in business activity (p. 359) standardized product n. a product that consumers consider identical in all essential features to other products in the same market (p. 192) standard of value n. the yardstick of economic worth in the exchange process (p. 289) start-up costs n. the expenses that a new business must pay to enter a market and begin selling to consumers (p. 209) state bank n. a bank chartered by a state government (p. 296) statistics n. numerical data (p. 24) stock n. shares of ownership in a corporation (p. 238) stockbroker n. an agent who buys and sells securities for customers (p. 332) stock exchange n. a secondary market where securities are bought and sold (p. 330) stock index n. an instrument used to measure and report the change in prices of a set of stocks (p. 334) socialism n. an economic system in which the government owns some or all of the factors of production (p. 43) stored-value card n. a card that represents money that the card holder has on deposit with the card issuer (p. 308) R42 Glossary G l o s s a r y store of value n. something that holds its value over time (p. 289) strike n. a work stoppage
used to gain negotiating power while attempting to convince an employer to improve wages, working conditions, or other work-related matters (p. 274) structural unemployment n. unemployment that exists when the available jobs do not match the skills of available workers (p. 384) subsidy n. a government payment that helps cover the cost of an economic activity that can beneﬁ t the public as a whole (p. 88) substitutes n. products that can be used in place of other products to satisfy consumer wants (p. 112) substitution effect n. the pattern of behavior that occurs when consumers react to a change in price of a product by buying a substitute product that offers a better relative value (p. 107) supply n. the willingness and ability of a producer to produce and sell a product (p. 130) supply curve n. a graph that shows data from a supply schedule (p. 134) supply schedule n. a table that shows how much of a good or service an individual producer is willing and able to offer for sale at each price (p. 132) supply-side ﬁ scal policy n. a plan designed to provide incentives to producers to increase aggregate supply (p. 458) surplus n. a situation in which supply is greater than demand, usually the result of prices being set too high (p. 167) T tariff n. a fee charged for goods brought into a country from another country (p. 521) tax n. a mandatory payment to a government (p. 410) taxable income n. the portion of income subject to taxation after all deductions and exemptions (pp. 421, 604) tax assessor n. a government ofﬁ cial who determines the value of property to be taxed (p. 437) tax base n. a form of wealth—such as income, property, goods, or services—that is subject to taxes (p. 412) tax incentive n. the use of taxes to encourage or discourage certain economic behaviors (p. 417) tax return n. a form used to report income and taxes owed to the government (p. 421) technological monopoly n. a monopoly that exists because a ﬁ rm controls a manufacturing method, invention, or type of technology (p. 201) technology n. the application of scientiﬁ c methods and innovations to production (p. 149) telecommuting n. the practice of doing ofﬁ ce work in a location other than the ofﬁ ce (p.
270) telework see telecommuting temp, temps, temping see contingent employment thrift institution n. a ﬁ nancial institution that serves savers (p. 478) tight-money policy see contractionary monetary policy total cost n. the sum of ﬁ xed and variable costs (p. 140) total revenue n. the income a business receives from selling its products (pp. 122, 142) total revenue test n. a method of measuring elasticity by comparing the total revenue a business would receive when offering its product at various prices (p. 122) trade barrier n. any law passed to limit free trade between nations (p. 520) trade deﬁ cit n. an unfavorable balance of trade that occurs when a nation imports more than it exports (p. 529) trade-off n. the alternative someone gives up when making an economic choice (p. 14) trade surplus n. a favorable balance of trade that occurs when a nation exports more than it imports (p. 529) trade union see labor union trade war n. a succession of trade barriers between nations (p. 522) trade-weighted value of the dollar n. a measure of the international value of the dollar that determines if the dollar is strong or weak as measured against another currency (p. 528) traditional economy n. an economic system in which people make economic decisions based on customs and beliefs that have been handed down from one generation to the next (p. 38) transfer payment n. money distributed to individuals who do not provide goods or services in return (pp. 89, 432) transitional economy n. a country that has moved (or is moving) from a command economy to a market economy (p. 545) Treasury bill (T bill) n. a short-term bond that matures in less than one year (p. 464) Glossary R43 Treasury bond n. a long-term bond that matures in 30 years (p. 464) voluntary exchange n. a trade in which the parties involved anticipate that the beneﬁ ts will outweigh the cost (p. 49) voluntary export restraint (VER) n. a self-imposed limit on exports to certain countries to avoid quotas or tariffs (p. 521) W wage and price controls n. government limits on increases in wages and prices (p. 501) wage-price spiral n. a cycle that begins with increased wages, which lead to higher production costs, which in turn
result in higher prices, which result in demands for even higher wages (p. 400) wage rate n. the established rate of pay for a speciﬁ c job or work performed (p. 261) wages n. the payments workers receive in return for work (p. 258) wants n. desires that can be satisﬁ ed by consuming a good or service (p. 4) welfare n. government economic and social programs that provide assistance to the needy (p. 392) withholding n. the money taken from a worker’s pay before the worker receives the pay (p. 421) workfare n. a program that requires welfare recipients to do some kind of work in return for their beneﬁ ts (p. 393) World Bank n. a ﬁ nancial institution that provides loans, policy advice, and technical assistance to low and middle income countries to reduce poverty (p. 559) World Trade Organization (WTO) n. an organization that negotiates and administers trade agreements, resolves trade disputes, monitors trading policies, and supports developing countries (p. 535) Y yield n. the annual rate of return on a bond (p. 338) Treasury note n. an intermediate-term bond that matures in between two and ten years (p. 464) trough n. the end of a contraction in the economy (p. 359); see business cycle trust n. a group of ﬁ rms combined in order to reduce competition in an industry (p. 214) trust fund n. a fund held for a speciﬁ c purpose to be expended at a future date (p. 465) U underemployed n. people employed part-time who want to work full-time, or those who work at a job below their skill level (p. 383) underground economy n. market activities that go unreported because they are illegal or because those involved want to avoid taxation (p. 354) underutilization n. the condition in which economic resources are not being used to their full potential, resulting in fewer goods and services (p. 20) unemployment rate n. the percentage of the labor force that is jobless and actively looking for work (p. 382) union see labor union union shop n. a business in which workers are required to join a union within a set time period after being hired (p. 279) unit elastic adj. relating to a situation in which the percentage change in
price and quantity demanded are the same (p. 118) unlimited liability n. a situation in which a business owner is responsible for all the losses and debts of a business (p. 228) unlimited life n. a situation in which a corporation continues to exist even after a change in ownership (p. 240) user fee n. money charged for the use of a good or service (p. 425) utility n. the beneﬁ t or satisfaction gained from using a good or service (p. 12) V variable costs n. business costs that vary with the level of production output (p. 140) vertical merger n. the combining of two or more businesses involved in different steps of producing or marketing a product or service (p. 243) R44 Glossary Spanish Glossary A absolute advantage [ventaja absoluta] n. capacidad de un país para hacer un producto más eﬁ cientemente que otro país (pág. 513) aggregate demand [demanda agregada] n. suma de las demandas totales existentes en la economía (pág. 360) aggregate supply [oferta agregada] n. suma de las ofertas totales existentes en la economía (pág. 360) antitrust legislation [legislación antimonopolio] n. leyes que deﬁ nen los monopolios y dan al gobierno el poder de controlarlos o disolverlos (pág. 214) appropriations [asignaciones] n. cantidades ﬁ jas de dinero destinadas a ﬁ nes determinados (pág. 431) authoritarian [autoritario] adj. lo que exige una lealtad y una obediencia absolutas ante la autoridad (pág. 43) automated teller machine (ATM) [cajero automático (ATM)] n. dispositivo electrónico que permite a los clientes de un banco hacer transacciones sin ver al personal del banco (pág. 308) automatic stabilizer [estabilizador automático] n. característica de la política ﬁ scal que actúa automáticamente para mantener estable
la economía (pág. 447) B balanced budget [presupuesto balanceado] n. presupuesto en el que el total de ingresos del gobierno es igual al total de gastos del gobierno (pág. 436) balance of payments [balanza de pagos] n. registro de todas las transacciones ocurridas entre las personas, las empresas y las unidades gubernamentales de un país y las del resto del mundo (pág. 529) balance of trade [balanza de comercio] n. diferencia entre el valor de las exportaciones y el de las importaciones de un país (pág. 529) bank exam [inspección bancaria] n. auditoría, realizada por la Reserva Federal, de las prácticas ﬁ nancieras de un banco (pág. 481) bank holding company [compañía tenedora de acciones bancarias] n. compañía que posee más de un banco (pág. 481) barrier to entry [barrera de entrada] n. todo factor que impide que una empresa entre en un mercado (pág. 198) barter [trueque] n. intercambio de bienes y servicios sin utilizar dinero (pág. 288) bear market [mercado a la baja (mercado “oso”)] n. situación en la que los precios del mercado de valores bajan constantemente con el tiempo (pág. 335) binding arbitration [arbitraje vinculante] n. proceso por el que un tercero imparcial resuelve los conﬂ ictos entre la dirección de una empresa y los sindicatos (pág. 280) black market [mercado negro] n. compra o venta ilegal de bienes o servicios, violando los controles de precios o el racionamiento (pág. 183) Board of Governors [Junta de Go
bernadores] n. junta de siete miembros nombrados que supervisa las operaciones del Sistema de la Reserva Federal y establece la política monetaria (pág. 476) bond [bono] n. contrato emitido por una sociedad anónima que promete reembolsar el dinero prestado, más intereses, según las fechas establecidas (pág. 240) bounced check [cheque rebotado] véase overdraft [sobregiro] break-even point [punto de equilibrio] n. situación en la que el total de costos y el total de ingresos son iguales (pág. 142) budget [presupuesto] n. plan para asignar el ahorro y el gasto del ingreso (pág. 574) budget deﬁ cit [déﬁ cit presupuestario] n. situación en la que los gastos del gobierno son mayores que los ingresos (pág. 462) budget surplus [superávit presupuestario] n. situación en la que los ingresos del gobierno son mayores que los gastos (pág. 462) bull market [mercado alcista (mercado “toro”)] n. situación en la que los precios del mercado de valores suben constantemente con el tiempo (pág. 335) business cycle [ciclo económico] n. serie de períodos de ascenso y descenso de la actividad económica, medida por los aumentos o las disminuciones del producto interior bruto real (pág. 358) business organization [organización comercial] n. empresa que produce bienes o presta servicios, generalmente para obtener ganancias (pág. 226) business structure [estructura comercial] véase business organization [organización comercial] C capital [capital] n. todos los recursos que
se crean y utilizan para producir y distribuir bienes y servicios (pág. 8) capital budget [presupuesto de capital] n. plan referente a los principales gastos o inversiones (pág. 436) capital deepening [intensiﬁ cación del uso del capital] n. aumento de la razón entre el capital y el trabajo (pág. 371) capital ﬂ ight [fuga de capitales] n. situación en la que capitales de un país se invierten fuera de dicho país (pág. 558) Spanish Glossary R45 capital gain [ganancias de capital] n. ganancias obtenidas de la venta de valores (pág. 330) capitalism [capitalismo] n. sistema económico basado en la propiedad privada de los factores de producción (pág. 49) capital market [mercado de capitales] n. mercado en el que se venden y compran activos ﬁ nancieros a largo plazo (pág. 322) cartel [cártel] n. organización formal de vendedores o productores que regulan la producción, la ﬁ jación de precios y la comercialización de un producto (págs. 198, 535) cease and desist order [orden de cese de actividades comerciales] n. decisión judicial que obliga a una compañía a dejar de realizar una práctica comercial injusta (pág. 217) central bank [banco central] n. principal autoridad monetaria de un país (pág. 474) centrally planned economy [economía de planiﬁ cación centralizada] n. sistema en el que los dirigentes del país toman todas las decisiones económicas (pág. 42) change in demand [cambio en la demanda] n. situación en la que un cambio en el mercado incita a los consum
idores a comprar una cantidad diferente de un bien o de un servicio a cada precio (pág. 109) change in quantity demanded [cambio en la cantidad demandada] n. cambio en la cantidad de un producto que los consumidores comprarán debido a un cambio en el precio (pág. 108) change in quantity supplied [cambio en la cantidad ofertada] n. aumento o disminución de la cantidad de un bien o de un servicio que los productores están dispuestos a vender debido a un cambio en el precio (pág. 146) change in supply [cambio en la oferta] n. situación en la que un cambio en el mercado incita a los productores a ofrecer para su venta una cantidad diferente a cada precio (pág. 148) check clearing [compensación de cheques] n. servicio proporcionado por la Reserva Federal para registrar las entradas y las salidas de los clientes de los bancos (pág. 480) circular ﬂ ow model [modelo de ﬂ ujo circular] n. visualización de todas las interacciones de una economía de mercado (pág. 52) civilian labor force [fuerza laboral civil] n. personas de 16 años o mayores que trabajan o que buscan activamente un trabajo y están en condiciones para trabajar (pág. 266) claim [reclamación] n. petición presentada ante una compañía de seguros para recibir un pago sobre una pérdida asegurada (pág. 596) closed shop [compañía de sindicación obligatoria] n. compañía en la que el empleador sólo puede contratar miembros del sindicato (pág. 279) coincident indicators [indicadores coincidentes] n. medidas del rendimiento económico
que generalmente cambian al mismo tiempo que cambia el producto interior bruto real (pág. 364) collective bargaining [negociación colectiva] n. proceso de negociación entre una empresa y sus empleados sindicalizados para establecer los salarios y mejorar las condiciones de trabajo (pág. 280) command economy [economía autoritaria] n. sistema económico en el que el gobierno toma todas las decisiones económicas (pág. 39) commodity money [dinero-mercancía] n. dinero que tiene un valor intrínsico basado en el material del que se compone (pág. 291) common stock [acciones ordinarias] n. participación en la propiedad de una sociedad anónima que da al titular derecho a voto y parte de las ganancias (pág. 331) communism [comunismo] n. sistema económico en el que no existe la propiedad privada y hay poca o ninguna libertad política (pág. 43) comparative advantage [ventaja comparativa] n. capacidad de un país para producir algo a un costo de oportunidad más bajo que el de otro país (pág. 513) competition [competencia] n. esfuerzo de dos o más personas que actúan independientemente por obtener clientes ofreciéndoles la mejor opción (pág. 49) competitive pricing [ﬁ jación de precios competitivos] n. situación en la que los productores venden bienes y servicios a precios que intentan el mejor equilibrio entre dos deseos: obtener las mayores ganancias y atraer a los clientes de los productores rivales (pág. 174) complements [complementarios] n. productos que se usan conjuntamente, de manera que el aument
o y la disminución de la demanda de uno produzca el aumento o la disminución de la demanda del otro (pág. 112) conglomerate [conglomerado] n. empresa compuesta de compañías que producen bienes o servicios no relacionados (pág. 243) consumer [consumidor] n. persona que compra bienes o servicios para su uso personal (pág. 5) consumer price index (CPI) [índice de precios al consumo (IPC)] v medida porcentual de los cambios en los precios de una cesta de los bienes y los servicios que los consumidores compran frecuentemente (pág. 396) consumer sovereignty [soberanía del consumidor] n. idea de que los consumidores tienen el control deﬁ nitivo sobre lo que se produce ya que son libres para comprar lo que quieren y para rechazar productos que no quieren (pág. 50) R46 Spanish Glossary contingent employment [empleo contingente] n. trabajo temporal o a tiempo parcial (pág. 270) contract [contrato] n. acuerdo formal con fuerza jurídica (pág. 598) contraction [contracción] n. reducción de la actividad económica (pág. 359); véase business cycle [ciclo económico] contractionary ﬁ scal policy [política ﬁ scal restrictiva] n. plan para reducir la demanda agregada y desacelerar la economía durante un período de expansión económica demasiado rápido (pág. 446) contractionary monetary policy [política monetaria restrictiva] n. plan para reducir la cantidad de dinero en circulación; también llamada política de dinero escaso (pág. 492) cooperative [cooperativa] n. tipo de negocio dirigido a favor del
beneﬁ cio compartido de los propietarios, que son también los clientes (pág. 250) co-pay [copago] n. cantidad que el asegurado debe pagar cuando una persona asegurada recibe atención médica (pág. 596) corporate income tax [impuesto de sociedades anónimas] n. impuesto basado en las ganancias de una sociedad anónima (pág. 412) corporation [sociedad anónima] n. empresa que pertenece a los titulares de acciones, o accionistas, que poseen los derechos a las ganancias de la compañía pero cuya responsabilidad es limitada respecto a las deudas y pérdidas de la compañía (pág. 238) cosigner [coﬁ rmante, aval, avalista] n. persona que asume la responsabilidad de la deuda si el prestatario no reembolsa el préstamo (pág. 583) cost-beneﬁ t analysis [análisis costo-beneﬁ cio] n. práctica de examinar los costos y los beneﬁ cios previstos de una opción, como ayuda en la toma de decisiones (pág. 15) cost-push inﬂ ation [inﬂ ación de costos] n. situación en la que el aumento de los costos de producción hace subir los precios (pág. 399) Council of Economic Advisers [Consejo de Consejeros Económicos] n. grupo de tres miembros que aconseja al Presidente sobre la política ﬁ scal y otros asuntos económicos (pág. 452) coupon rate [tasa de cupón] n. tasa de interés que el titular de un bono obtiene cada año hasta que vence el bono (pág. 338) craft union [
sindicato gremial] n. organización de trabajadores con aptitudes similares que trabajan en diferentes industrias para diferentes empleadores (pág. 274) credit [crédito] n. práctica de comprar bienes o servicios en el presente y pagarlos en el futuro (pág. 582) credit report [informe crediticio] n. documento emitido por una agencia de informes crediticios que explica detalladamente el historial de crédito de un consumidor (pág. 586) credit score [caliﬁ cación del riesgo crediticio] n. número que resume la reputación crediticia de un consumidor (pág. 586) crowding-out effect [efecto de exclusión] n. situación en la que el gobierno supera la oferta de las tasas de interés de bonos privados para obtener fondos prestables (pág. 466) currency [moneda] n. papel moneda y monedas metálicas (págs. 293, 475) customs duty [derecho arancelario] n. impuesto aplicado en Estados Unidos a los bienes importados (pág. 425) customs unions [uniones aduaneras] n. acuerdos que eliminan las barreras al comercio entre los miembros y establecen aranceles uniformes para los no miembros (pág. 532) cyclical unemployment [desempleo cíclico] n. desempleo causado por la parte del ciclo económico que presenta una actividad económica reducida (pág. 384) D debit card [tarjeta de débito] n. tarjeta que se puede usar como tarjeta de cajero automático (ATM) para retirar dinero o como cheque para hacer compras (pág. 308) debt restructuring [reestructur
ación de la deuda] n. método que utilizan los países con obligaciones de deuda pendientes para alterar los términos de los acuerdos de la deuda, a ﬁ n de conseguir alguna ventaja (pág. 559) deduction [deducible] n. cantidad que el asegurado paga antes de que pague la compañía aseguradora (pág. 596) default [incumplimiento] n. condición que se presenta cuando un país no puede pagar los intereses o el capital sobre un préstamo (pág. 559) deﬁ cit spending [gastos deﬁ citarios] n. práctica del gobierno de gastar más de lo que obtiene en ingresos en un determinado año ﬁ scal (pág. 462) deﬂ ation [deﬂ ación] n. disminución del nivel general de precios (pág. 398) demand [demanda] n. deseo de obtener algún bien o servicio y la capacidad para pagarlo (pág. 98) demand curve [curva de la demanda] n. gráﬁ ca que muestra una tabla de demanda, o la cantidad de un bien o de un servicio que una persona puede y está dispuesta a comprar a cada precio (pág. 102) demand deposits [depósitos a la vista] n. cuentas corrientes, llamadas así porque las cuentas corrientes pueden convertirse en dinero “a la vista” (pág. 293) Spanish Glossary R47 demand-pull inﬂ ation [inﬂ ación de demanda] n. condición que se presenta cuando la demanda total sube más rápido que la producción de bienes y servicios (pág. 399) demand schedule [tabla de demanda] n. tabla que
muestra la cantidad de un bien o de un servicio que una persona puede y está dispuesta a comprar a cada precio (pág. 100) demand-side ﬁ scal policy [política ﬁ scal sobre la demanda] n. plan para estimular la demanda agregada (pág. 454) deposit multiplier formula [fórmula del multiplicador de depósitos] n. fórmula matemática que indica cuánto aumentará la oferta monetaria tras realizar un depósito inicial de dinero en un banco (pág. 485) depreciate [depreciar] v. disminuir de valor (pág. 590) depression [depresión] n. período prolongado con un alto nivel de desempleo y una reducción de la actividad económica (pág. 359) deregulation [desregulación] n. reducción o eliminación de la vigilancia y el control de las empresas por parte del gobierno (pág. 218) derived demand [demanda derivada] n. demanda de un producto o un recurso que se basa en su aportación al producto ﬁ nal (pág. 259) developed nations [países desarrollados] n. países que tienen una economía de mercado, un nivel de vida relativamente alto, un PIB alto, industrialización, propiedad privada generalizada y un gobierno estable y efectivo (pág. 544) differentiated product [producto diferenciado] véase product differentiation [diferenciación de productos] diminishing returns [rentabilidad decreciente] n. situación en la que nuevos trabajadores hacen que el producto marginal aumente pero a un ritmo decreciente (pág. 139) discount rate [tasa de descuento] n. tasa de interés que aplica la Reserva Federal
cuando presta dinero a otros bancos (pág. 491) discretionary ﬁ scal policy [política ﬁ scal discrecional] n. medidas que toma el gobierno federal a voluntad para corregir la inestabilidad económica (pág. 446) discretionary spending [gastos discrecionales] n. gastos que el gobierno debe autorizar cada año (pág. 428) disequilibrium [desequilibrio] n. situación en la que la cantidad ofertada y la cantidad demandada no se encuentran en equilibrio (pág. 169) disposable personal income (DPI) [renta personal disponible (RPD)] n. renta personal menos los impuestos (pág. 355) diversiﬁ cation [diversiﬁ cación] n. práctica de distribuir las inversiones entre diferentes activos ﬁ nancieros para maximizar la rentabilidad y limitar el riesgo (pág. 327) dividend [dividendo] n. aquella parte de las ganancias de una sociedad anónima que la compañía paga a los accionistas (pág. 238) dumping [dumping] n. venta de un producto en otro país a un precio más bajo del que tiene en el mercado de origen (pág. 521) Dumpster diving [buceo en la basura] n. técnica utilizada por los ladrones de identidad para recoger información personal en la basura (pág. 584) E easy-money policy [política de dinero barato] véase expansionary monetary policy [política monetaria expansiva] economic cycle [ciclo económico] véase business cycle [ciclo económico] economic growth [crecimiento económico] n. aumento del producto interior bruto real de un país (pág. 358) economic interdependence [interdepend
encia económica] n. situación en la que los productores de un país dependen de otros para conseguir bienes y servicios que ellos no producen (pág. 510) economic model [modelo económico] n. representación simpliﬁ cada de las actividades, sistemas o problemas económicos (pág. 18) economics [economía] n. estudio de cómo las personas y la sociedad satisfacen sus deseos ilimitados con recursos limitados (pág. 4) economic system [sistema económico] n. forma en que la sociedad utiliza sus recursos escasos para satisfacer los deseos ilimitados de su población (pág. 38) economies of scale [economías de escala] n. situación en la que el costo promedio de producción disminuye al crecer el productor (pág. 201) economize [economizar] v. tomar decisiones según lo que se cree la mejor combinación de costos y beneﬁ cios (pág. 12) efﬁ ciency [eﬁ ciencia] n. condición en la que los recursos económicos se utilizan para producir la cantidad máxima de bienes y servicios (pág. 20) elastic [elástica] adj. situación en la que un cambio en el precio, ya sea para más o para menos, produce un cambio relativamente más grande en la cantidad demandada o en la cantidad ofertada (págs. 117, 154) elasticity of demand [elasticidad de la demanda] n. medida de la reacción de los consumidores ante los cambios de los precios en el mercado (pág. 117) elasticity of supply [elasticidad de la oferta] n. medida de la reacción de los productores ante los cambios de los precios
en el mercado (pág. 154) R48 Spanish Glossary embargo [embargo] n. ley que prohíbe la mayor parte o todo el comercio con un país determinado (pág. 521) entitlement [derechos sociales adquiridos] n. programa de asistencia social que tiene determinados requisitos de admisión (pág. 428) entrepreneurship [capacidad empresarial] n. combinación de visión, aptitud, ingenio y disposición de asumir riesgos, necesaria para crear y dirigir nuevas empresas (pág. 9) equilibrium price [precio de equilibrio] n. precio al que la cantidad demandada equivale a la cantidad ofertada (pág. 164) equilibrium wage [salario de equilibrio] n. salario en el que la cantidad de trabajadores demandados equivale a la cantidad de trabajadores ofertados; precio de mercado de la mano de obra (pág. 258) estate tax [impuesto de sucesiones] n. impuesto aplicado a los activos de una persona que ha muerto (pág. 425) European Union (EU) [Unión Europea (UE)] n. unión económica y política de los países europeos, establecida en 1993 (pág. 532) euro [euro] n. moneda única de la Unión Europea (pág. 533) excise tax [impuesto sobre consumos] n. impuesto aplicado a la producción o a la venta de un bien o un servicio determinado (págs. 149, 425) expansion [expansión] n. aumento de la actividad económica (pág. 358); véase business cycle [ciclo económico] expansionary ﬁ scal policy [política ﬁ scal expansiva] n. plan para aumentar la demanda agregada y estim
ular una economía débil (pág. 446) expansionary monetary policy [política monetaria expansiva] n. plan para aumentar la cantidad de dinero en circulación; también llamada política de dinero barato (pág. 492) exports [exportaciones] n. bienes o servicios producidos en un país y vendidos a otros países (pág. 516) externality [externalidad] n. efecto secundario de una transacción que afecta a alguien que no sea el productor o el comprador (pág. 87) F factor market [mercado de factores] n. mercado para los factores de producción: tierra, trabajo, capital y capacidad empresarial (pág. 52) factors of production [factores de producción] n. recursos económicos necesarios para producir bienes y servicios (pág. 8) federal budget [presupuesto federal] n. plan para gastar los ingresos obtenidos mediante los impuestos federales (pág. 431) federal funds rate (FFR) [tasa de interés para fondos federales (TFF)] n. interés al que una institución de depósitos presta por un día fondos disponibles a otra institución de depósitos (pág. 490) Federal Insurance Contributions Act (FICA) [Ley de Contribuciones al Seguro Federal] n. impuesto sobre nóminas que proporciona cobertura a las personas mayores, a los desempleados por incapacidad y a los familiares supervivientes de asalariados que han muerto (pág. 423) Federal Open Market Committee (FOMC) [Comité Federal del Mercado Abierto] n. junta del Sistema de la Reserva Federal que supervisa la venta y la compra de valores del gobierno federal (pág. 477) Federal Reserve System [Sistema de la Reserva Federal]
n. banco central de Estados Unidos, llamado comúnmente la Fed (pág. 474) ﬁ at money [dinero ﬁ duciario] n. dinero que no tiene respaldo tangible pero cuyo valor es declarado por el gobierno y aceptado por los ciudadanos (pág. 291) ﬁ ling status [estado personal] n. para la declaración de impuestos, se basa en el estado civil o en las cargas familiares (pág. 604) ﬁ nancial asset [activo ﬁ nanciero] n. derecho de la propiedad del prestatario (pág. 319) ﬁ nancial intermediary [intermediario ﬁ nanciero] n. institución que reúne fondos de los ahorradores e invierte estos fondos en activos ﬁ nancieros (pág. 319) ﬁ nancial market [mercado ﬁ nanciero] n. situación en la que los compradores y los vendedores intercambian activos ﬁ nancieros (pág. 319) ﬁ nancial system [sistema ﬁ nanciero] n. todas las instituciones que ayudan a transferir fondos entre los ahorradores y los inversionistas (pág. 318) ﬁ scal [ﬁ scal] adj. lo relacionado a los ingresos y a los gastos del gobierno (pág. 446) ﬁ scal policy [política ﬁ scal] n. uso que hace el gobierno federal de los impuestos y los gastos para afectar a la economía (pág. 446) ﬁ scal year [año ﬁ scal] n. período de 12 meses en el que una organización planiﬁ ca sus gastos (pág. 431) ﬁ xed costs [costos ﬁ jos] n. gastos en los que incurren los
propietarios de empresas, independientemente de cuánto produzcan (pág. 140) ﬁ xed rate of exchange [tasa de cambio ﬁ ja] n. sistema en el que la divisa de un país es ﬁ ja o constante respecto a las otras divisas (pág. 526) Spanish Glossary R49 ﬂ exible exchange rate [tasa de cambio ﬂ exible] n. sistema en el que la tasa de cambio para una divisa ﬂ uctúa al ﬂ uctuar la oferta y la demanda de la divisa; también llamada tasa ﬂ otante (pág. 527) focus group [grupo focal] n. discusión dirigida por un moderador y realizada con pequeños grupos de consumidores (pág. 208) foreign exchange market [mercado de divisas] n. mercado en el que se compran y venden divisas de diferentes países (pág. 526) foreign exchange rate [tasa de cambio de divisas] n. precio de una divisa expresado en las divisas de otros países (pág. 526) franchise [franquicia] n. negocio formado por negocios parcialmente independientes que ofrecen todos los mismos productos o servicios (pág. 248) franchisee [franquiciado] n. negocio parcialmente independiente que paga un cargo por el derecho a vender en una determinada zona los productos o servicios de la compañía matriz (pág. 248) free contract [contrato libre] n. situación en la que las personas deciden por sí solas qué contratos legales aceptar (pág. 73) free-enterprise system [sistema de libre mercado] n. otro nombre del capitalismo, sistema económico basado en la propiedad privada de los rec
ionalmente (pág. 262) global economy [economía global] n. todas las interacciones económicas que cruzan las fronteras internacionales (pág. 61) gold standard [patrón oro] n. sistema en el que la unidad monetaria básica es igual a una cantidad de oro establecida (pág. 299) goods [bienes] n. objetos físicos, como los alimentos, la ropa y los muebles, que pueden comprarse (pág. 5) government monopoly [monopolio gubernamental] n. monopolio que existe debido a que el gobierno posee y dirige esa empresa o autoriza un solo productor (pág. 201) grant-in-aid [donativo del gobierno federal] n. pago de transferencia del gobierno federal a gobiernos estatales o locales (pág. 432) gross domestic product (GDP) [producto interior bruto (PIB)] n. valor de mercado de todos los bienes y servicios ﬁ nales producidos en un país durante un determinado período de tiempo (pág. 350) gross national product (GNP) [producto nacional bruto (PNB)] n. valor de mercado de todos los bienes y servicios ﬁ nales producidos por un país durante un determinado período de tiempo (pág. 355) H hacking [hacking] n. técnica empleada por los ladrones de identidad para recoger información personal mediante computadoras y tecnología relacionada (pág. 588) horizontal merger [fusión horizontal] n. unión de dos o más compañías que ofrecen productos o servicios iguales o similares (pág. 243) human capital [capital humano] n. conocimientos y aptitudes que permiten a los trabajadores ser productivos (pág. 261) human
development index (HDI) [índice de desarrollo humano (IDH)] n. combinación del PIB real per cápita, la esperanza de vida al nacer, la tasa de alfabetización de adultos y la tasa de matriculación de los estudiantes de un país y todo esto indica cómo es la vida en un país determinado (pág. 547) R50 Spanish Glossary hyperinﬂ ation [hiperinﬂ ación] n. tasa de inﬂ ación acelerada y no controlada superior al 50 por ciento (pág. 398) I identity theft [robo de identidad] n. uso de la información personal de otra persona con ﬁ nes criminales (pág. 588) imperfect competition [competencia imperfecta] n. estructura de mercado que carece de una o más de las condiciones necesarias para la competencia perfecta (pág. 195) imports [importaciones] n. bienes o servicios producidos en un país y comprados por otro (pág. 516) incentive [incentivo] n. beneﬁ cio ofrecido para estimular a las personas a que actúen de cierta manera (págs. 12, 176) incidence of a tax [incidencia ﬁ scal] n. carga ﬁ nal de un impuesto (pág. 415) income distribution [distribución de la renta] n. forma en que la renta se divide entre las personas de un país (pág. 390) income effect [efecto renta] n. cambio en la cantidad de un bien o de un servicio que un consumidor comprará debido a la variación de su renta (y por ello su poder adquisitivo) (pág. 107) income inequality [desigualdad de la renta] n. distribución desigual de la renta (pág. 390) increasing returns [
rentabilidad creciente] n. situación en la que la contratación de nuevos trabajadores hace aumentar el producto marginal (pág. 139) independent contractor [contratista independiente] n. alguien que vende sus servicios mediante un contrato (pág. 270) individual income tax [impuesto sobre la renta personal] n. impuesto basado en las rentas que una persona recibe de todas las fuentes (pág. 412) industrial union [sindicato industrial] n. organización de trabajadores con muchas y diversas aptitudes y que trabajan en la misma industria (pág. 274) inelastic [inelástica] n. situación en la que la cantidad demandada o la cantidad ofertada cambia poco al cambiar el precio (págs. 117, 155) infant industries [industrias nacientes] n. nuevas industrias que frecuentemente son incapaces de competir contra los competidores más grandes y establecidos (pág. 523) infant mortality rate [tasa de mortalidad infantil] n. número de niños que mueren durante el primer año de vida por 1,000 nacimientos (pág. 547) inferior goods [bienes inferiores] n. bienes que tienen menos demanda por parte de los consumidores cuando aumentan sus ingresos (pág. 110) inﬂ ation [inﬂ ación] n. aumento persistente del nivel general de precios, o disminución persistente del poder adquisitivo del dinero (pág. 396) inﬂ ation rate [tasa de inﬂ ación] n. tasa de variación de los precios durante un período de tiempo establecido (pág. 397) infrastructure [infraestructuras] n. conjunto básico de los sist
emas de soporte, como los sistemas energéticos, de comunicaciones, de transporte, de agua, sanitarios y de educación, que se necesitan para el funcionamiento de la economía y la sociedad (págs. 86, 545) input costs [costos de los insumos] n. precio de los recursos necesarios para producir un bien o un servicio (pág. 148) insourcing [uso de recursos internos] n. práctica de las compañías extranjeras que establecen operaciones en Estados Unidos y por lo tanto crean puestos de trabajo en este país (pág. 269) interest [interés] n. cargo que paga un banco por el uso del dinero (pág. 578) International Monetary Fund (IMF) [Fondo Monetario Internacional (FMI)] n. organización internacional establecida para promocionar la cooperación monetaria internacional, fomentar el crecimiento económico y proporcionar apoyo ﬁ nanciero temporal a los países para ayudar a mitigar el ajuste de la balanza-de-pagos (pág. 559) investment [inversión] n. uso actual de la renta de manera tal que permita obtener un beneﬁ cio futuro (pág. 318) investment objective [objetivo de inversión] n. meta ﬁ nanciera utilizada para determinar si una inversión es apropiada (pág. 324) J junk bond [bono basura] n. bono de empresa que es de alto riesgo y de alto rendimiento (pág. 339) K Keynesian economics [economía keynesiana] n. idea, propuesta inicialmente por John Maynard Keynes, de que el gobierno necesita estimular la demanda agregada en períodos de recesión (pág
. 454) L labor [trabajo] n. todo el tiempo, esfuerzo y talento humano usado para producir bienes y servicios (pág. 8) labor input [factor trabajo] n. magnitud de la fuerza laboral multiplicada por la duración de la semana laborable (pág. 371) labor productivity [productividad del trabajo] n. cantidad de bienes y servicios que una persona puede producir en un tiempo determinado (pág. 149) Spanish Glossary R51 labor union [sindicato laboral] n. organización de trabajadores que trata de mejorar para sus miembros los salarios, las condiciones laborales, los beneﬁ cios suplementarios, la seguridad en el empleo y otros asuntos relacionados con el trabajo (pág. 274) Laffer Curve [curva de Laffer] n. gráﬁ ca que ilustra cómo afecta la reducción de los impuestos a los ingresos ﬁ scales y al crecimiento económico (pág. 459) lagging indicators [indicadores retrasados] n. medidas del rendimiento económico que suelen cambiar después de cambiar el producto interior bruto real (pág. 364) laissez faire [laissez faire] n. principio según el cual el gobierno no debe interferir en la economía (pág. 49) land [tierra] n. todos los recursos naturales sobre o bajo el suelo que se utilizan para producir bienes y servicios (pág. 8) landlord [propietario de una propiedad] n. dueño de una propiedad de alquiler (pág. 609) law of comparative advantage [ley de la ventaja comparativa] n. ley según la cual los países se beneﬁ cian cuando producen art
ículos cuya fabricación realizan con la mayor eﬁ ciencia y con el menor costo de oportunidad (pág. 514) law of demand [ley de la demanda] n. establece que cuando el precio de un bien o de un servicio baja la cantidad demandada aumenta, y cuando los precios suben la cantidad demandada disminuye (pág. 99) law of diminishing marginal utility [ley de la utilidad marginal decreciente] n. establece que el beneﬁ cio marginal obtenido al consumir cada unidad adicional de un bien o de un servicio durante un determinado período de tiempo tiende a disminuir tras el consumo de cada una (pág. 106) law of increasing opportunity costs [ley de costos de oportunidad crecientes] n. establece que al pasar de fabricar un producto a fabricar otro, se necesitan cada vez más recursos para aumentar la fabricación del segundo producto, lo cual hace aumentar los costos de oportunidad (pág. 21) law of supply [ley de la oferta] n. establece que los productores están dispuestos a vender más de un bien o de un servicio a un precio más alto que a un precio más bajo (pág. 131) leading indicators [indicadores principales] n. medidas del rendimiento económico que generalmente cambian antes de que cambie el producto interior bruto real (pág. 364) lease [contrato de arrendamiento ﬁ nanciero] n. contrato para alquilar un apartamento, vehículo u otro objeto durante un determinado período de tiempo (pág. 609) legal equality [igualdad legal] n. situación en la que todo el mundo tiene los mismos derechos económicos bajo la ley (pág. 73) less developed
countries (LDCs) [países menos desarrollados (PMD)] n. países con un PIB más bajo, menos industrias bien desarrolladas y un nivel de vida menor; a veces, se llaman economías emergentes (pág. 545) life expectancy [esperanza de vida al nacer] n. promedio de años que se prevé que una persona vivirá si las tendencias de mortalidad actuales continúan durante el resto de la vida de esa persona (pág. 547) limited liability [responsabilidad limitada] n. situación en la que la responsabilidad del propietario de una empresa respecto a las deudas y a las pérdidas de la empresa es limitada (pág. 240) limited liability partnership (LLP) [sociedad de responsabilidad limitada (SRL)] n. sociedad en la que no todos los socios son responsables de las deudas y de otras obligaciones de los otros socios (pág. 233) limited life [vida limitada] n. situación en la que una empresa deja de existir si el propietario muere, se jubila o abandona la empresa (pág. 228) limited partnership [sociedad limitada] n. sociedad en la que hay al menos un socio que no participa en la gestión de la empresa y es responsable sólo de los fondos que invirtió (pág. 233) literacy rate [tasa de alfabetización] n. porcentaje de personas mayores de 15 años que saben leer y escribir (pág. 547) loan [préstamo] n. dinero prestado que se reembolsa generalmente con intereses (pág. 582) Lorenz curve [curva de Lorenz] n. curva que muestra el grado de desigualdad de la renta de un país (pág. 391) M macroeconomic
equilibrium [equilibrio macroeconómico] n. punto donde la demanda agregada equivale a la oferta agregada (pág. 361) macroeconomics [macroeconomía] n. estudio del comportamiento de la economía en su conjunto; lo relacionado a la actividad económica a gran escala (pág. 27) mandatory spending [gastos obligatorios] n. gastos que debe realizar el gobierno según las leyes actuales (pág. 428) marginal beneﬁ t [beneﬁ cio marginal] n. beneﬁ cio o satisfacción obtenido al consumir una unidad adicional de un bien o de un servicio (pág. 16) marginal cost [costo marginal] n. costo adicional de producir o consumir una unidad adicional de un bien o de un servicio (págs. 16, 140) marginal product [producto marginal] n. cambio en el producto total que es resultado de añadir un trabajador más (pág. 138) R52 Spanish Glossary marginal revenue [ingreso marginal] n. dinero obtenido al vender cada unidad adicional (pág. 142) market [mercado] n. cualquier lugar o situación en que las personas compran y venden bienes y servicios (pág. 48) market allocation [reparto de mercado] n. acuerdo entre dos o más empresas competidoras por el que se divide un mercado (pág. 216) market demand curve [curva de demanda de mercado] n. gráﬁ ca que muestra datos de una tabla de demanda de mercado, o la cantidad de un bien o de un servicio que todos los consumidores pueden y están dispuestos a comprar a cada precio (pág. 102) market demand schedule [tabla de demanda de mercado] n. tabla que muestra la cantidad de un b
ien o de un servicio que todos los consumidores pueden y están dispuestos a comprar a cada precio de un mercado (pág. 100) market division [repartición de mercado] véase market allocation [reparto de mercado] market economy [economía de mercado] n. sistema económico basado en la elección individual y el intercambio voluntario (pág. 39) market equilibrium [equilibrio del mercado] n. situación en la que la cantidad ofertada y la cantidad demandada a un precio determinado son iguales (pág. 164) market failure [fallo del mercado] n. situación en la que personas no participantes de una interacción del mercado se beneﬁ cian de ella o pagan parte de sus costos (pág. 84) market research [investigación de mercados] n. recogida y evaluación de información sobre las preferencias de los consumidores respecto a bienes y servicios (pág. 208) market share [cuota de mercado] n. porcentaje del total de ventas de una empresa en un mercado determinado (pág. 209) market structure [estructura de mercado] n. modelo económico de competencia entre las empresas de la misma industria (pág. 192) market supply curve [curva de oferta de mercado] n. gráﬁ ca que muestra datos de una tabla de oferta de mercado (pág. 134) market supply schedule [tabla de oferta de mercado] n. tabla que muestra la cantidad de un bien o de un servicio que todos los productores de un mercado pueden y están dispuestos a ofrecer para su venta a cada precio (pág. 132) maturity [vencimiento] n. fecha en la que un bono debe reembolsarse (pág. 338) Medicaid [Medicaid] n. programa de seguro mé
dico gubernamental destinado a las personas de baja renta (pág. 429) Medicare [Medicare] n. programa de seguro de salud nacional y gubernamental destinado principalmente a los ciudadanos mayores de 65 años (pág. 423) medium of exchange [medio de intercambio] n. medio por el que se pueden intercambiar bienes y servicios (pág. 288) merger [fusión] n. unión de dos o más compañías para formar una sola compañía (pág. 214) microeconomics [microeconomía] n. estudio del comportamiento de los participantes individuales de una economía, como las personas, las familias y las empresas (pág. 27) minimum balance requirement [requisito de saldo mínimo] n. cantidad de dinero que se debe mantener en una cuenta para evitar los cargos (pág. 576) minimum wage [salario mínimo] n. la menor cantidad, según establece la ley, que un empleador puede pagar a un trabajador por una hora de trabajo (págs. 182, 262) mixed economy [economía mixta] n. sistema económico que presenta elementos de las economías tradicional, autoritaria y de mercado; sistema económico más común (pág. 58) modiﬁ ed free enterprise economy [economía de libre mercado modiﬁ cada] n. sistema económico mixto que incluye algunas medidas protectoras, disposiciones y reglamentos del gobierno, para ajustar el sistema de libre mercado (pág. 80) monetarism [monetarismo] n. teoría económica que sugiere que los cambios rápidos en la oferta monetaria son la causa principal de la inestabilidad
económica (pág. 496) monetary [monetario] adj. lo relacionado al dinero (pág. 474) monetary policy [política monetaria] n. medidas de la Reserva Federal que cambian la oferta monetaria para inﬂ uir en la economía (pág. 490) money [dinero] n. todo lo que las personas aceptan como pago de bienes y servicios (pág. 288) money market [mercado monetario] n. mercado en el que se compran y venden activos ﬁ nancieros a corto plazo (pág. 322) monopolistic competition [competencia monopolista] n. estructura de mercado en la que un gran número de vendedores ofrecen a los consumidores productos similares pero no estandarizados (pág. 206) monopoly [monopolio] n. estructura de mercado en la que un único vendedor vende un producto para el que no existen sustitutos adecuados (pág. 198) monopsony [monopsonio] n. estructura de mercado en la que existe gran número de vendedores pero sólo un comprador grande (pág. 212) Spanish Glossary R53 multifactor productivity [productividad multifactorial] n. razón entre la producción económica de una industria y los factores trabajo y capital (pág. 372) multinational corporation [empresa multinacional] n. sociedad anónima que tiene establecimientos en varios países (pág. 243) mutual fund [fondo de mercado monetario, fondo mutual] n. compañía de inversión que reúne dinero de inversionistas individuales y lo utiliza para comprar una variedad de activos ﬁ nancieros (pág. 320) N NAFTA [NAFTA] n. Tratado de Libre Comercio con América del Norte, convenio que asegura el
libre comercio por todo el continente y constituye la zona de libre comercio más grande del mundo (pág. 533) national accounts [cuentas nacionales] véase national income accounting [contabilidad nacional] national bank [banco nacional] n. banco autorizado por el gobierno nacional (pág. 299) national debt [deuda pública] n. cantidad total de dinero que debe el gobierno federal (pág. 462) national income (NI) [renta nacional (RN)] n. renta total percibida en un país por la producción de bienes y servicios durante un determinado período de tiempo (pág. 355) national income accounting [contabilidad nacional] n. método de analizar la economía de un país usando medidas estadísticas de los ingresos, los gastos y la producción (pág. 350) nationalize [nacionalizar] v. pasar de la propiedad privada a la propiedad gubernamental o pública (pág. 61) natural monopoly [monopolio natural] n. situación del mercado en la que los costos de producción son más bajos cuando una única empresa proporciona un producto o un servicio (pág. 201) near money [cuasidinero] n. cuentas de ahorro y otros depósitos a plazo similares que pueden convertirse en dinero de manera relativamente fácil (pág. 293) needs [necesidades] n. objetos como los alimentos, la ropa y los lugares de vivienda, que son necesarios para la vida (pág. 4) negative externality [externalidad negativa] n. externalidad que supone un costo para personas no participantes en la actividad económica original (pág. 87) net national product (NNP) [producto nac
ional neto (PNN)] n. producto nacional bruto menos la depreciación del capital social. Es decir, es el valor de los bienes y los servicios ﬁ nales menos el valor de los bienes capitales que quedaron desgastados durante el año (pág. 355) nominal GDP [PIB nominal] n. producto interior bruto expresado en función del valor actual de los bienes y los servicios (pág. 352) nonmarket activities [actividades no comerciales] n. servicios que tienen un valor económico en potencia pero que se prestan sin cobrar (pág. 354) nonprice competition [competencia no basada en el precio] n. uso de factores distintos al precio, como el estilo, el servicio, la publicidad o los regalos, para tratar de convencer a los clientes para que compren algo de un productor y no de otro (pág. 207) nonproﬁ t organization [organización sin ﬁ nes de lucro] n. institución que actúa como empresa pero que existe para beneﬁ ciar a la comunidad en lugar de obtener ganancias (pág. 250) normal goods [bienes normales] n. bienes que tienen más demanda por parte de los consumidores cuando aumentan sus ingresos (pág. 110) normative economics [economía normativa] n. forma de describir y explicar cómo debería ser el comportamiento económico y no cómo es en realidad (pág. 29) not-for-proﬁ t [sin ﬁ nes de lucro] véase nonproﬁ t organization [organización sin ﬁ nes de lucro] O oligopoly [oligopolio] n. estructura de mercado en la que un número reducido de vendedores ofrecen un producto similar (pág. 209)
OPEC [OPEP] n. Organización de Países Exportadores de Petróleo, grupo comercial regional (pág. 535) open market operations [operaciones de mercado abierto] n. compraventa por parte de la Reserva Federal de valores del gobierno federal; instrumento de política monetaria de mayor uso por la Reserva Federal para ajustar la oferta monetaria (pág. 490) open opportunity [oportunidad abierta] n. capacidad para que todo el mundo pueda entrar y competir en el mercado según su libre elección (pág. 73) operating budget [presupuesto de operación] n. plan para los gastos diarios (pág. 436) opportunity cost [costo de oportunidad] n. costo de elegir una alternativa económica en lugar de otra (pág. 14) option [opción] n. contrato por el que se da al inversionista el derecho a comprar o vender acciones en una fecha futura y a un precio establecido (pág. 333) outsourcing [subcontratación] n. práctica de contratar una empresa externa, a menudo en un país extranjero, para que proporcione bienes y servicios (pág. 269) R54 Spanish Glossary overdraft [sobregiro] n. cheque u otra forma de retirar fondos que excede del saldo existente en la cuenta (pág. 576) P par value [valor a la par] n. cantidad que el emisor de un bono promete pagar al comprador en la fecha de vencimiento (pág. 338) partnership [sociedad] n. empresa que pertenece a dos o más personas, o “socios”, que acuerdan la forma de repartir las responsabilidades, las ganancias y las pérdidas (pág. 232) patent [patente] n
[pobreza] n. situación en la que la renta y los recursos de una persona no le permiten obtener un nivel de vida mínimo (pág. 388) poverty line [línea de pobreza] véase poverty threshold [umbral de pobreza] poverty rate [tasa de pobreza] n. porcentaje de personas que viven en hogares cuya renta es inferior a la del umbral de pobreza (pág. 389) poverty threshold [umbral de pobreza] n. renta mínima oﬁ cial necesaria para pagar los gastos básicos de la vida (pág. 388) predatory pricing [establecer precios predatorios] n. ﬁ jar los precios por debajo del costo durante un tiempo para excluir de un mercado a los competidores de menor tamaño (pág. 216) preferred stock [acciones preferentes] n. participación en la propiedad de una sociedad anónima que da al titular parte de las ganancias pero generalmente no da derecho a voto (pág. 331) premium [prima] n. cantidad que se paga por un seguro (pág. 596) price ceiling [precio máximo] n. precio máximo establecido que los vendedores pueden cobrar por un producto (pág. 180) price ﬁ xing [imposición de precios] n. pactos entre dos o más empresas por los que ﬁ jan los precios de productos competidores (pág. 216) price ﬂ oor [precio mínimo] n. precio mínimo establecido al que los compradores deben pagar un producto (pág. 182) price maker [ﬁ jador de precio] n. empresa que no tiene que tomar en cuenta a los competidores cuando ﬁ ja sus precios (pág. 198
) price taker [tomador de precio] n. compañía que debe aceptar el precio de mercado ﬁ jado por la interacción de la oferta y la demanda (pág. 193) primary market [mercado primario] n. mercado de valores para comprar activos ﬁ nancieros directamente del emisor (pág. 322) prime rate [tasa preferencial] n. tasa de interés que los bancos aplican a sus mejores clientes (pág. 491) private company [compañía privada] n. sociedad anónima que controla quién puede comprar o vender sus acciones (pág. 238) private property rights [derechos a propiedad privada] n. derechos de las personas y de los grupos a poseer recursos y empresas (pág. 48) private sector [sector privado] n. parte de la economía que pertenece a las personas o a las empresas (pág. 432) privatization [privatización] n. proceso de transferir a las personas propiedades y empresas públicas (pág. 563) privatize [privatizar] v. pasar de la propiedad gubernamental o pública a la propiedad privada (pág. 61) producer [productor] n. persona que produce bienes o presta servicios (pág. 5) producer price index (PPI) [índice de precios al por mayor (IPM)] n. medida de los cambios en los precios al por mayor (pág. 397) product differentiation [diferenciación de productos] n. intento de distinguir un producto de otros productos similares (pág. 206) Spanish Glossary R55 product market [mercado de productos] n. mercado en el que se compran y venden bienes y servicios (pág. 52) production possibilities curve (PPC) [curva de posibilidades de producci
ón (CPP)] n. gráﬁ ca utilizada para ilustrar el efecto de la carencia sobre una economía (pág. 18) productivity [productividad] n. cantidad de producto obtenido a partir de una cantidad establecida de insumos (pág. 372) productivity, labor [productividad, trabajo] véase labor productivity [productividad del trabajo] proﬁ t [ganancias] n. ganancias ﬁ nancieras que obtiene un vendedor al realizar una transacción comercial (pág. 49); dinero que queda tras restar los costos de fabricar un producto a los ingresos obtenidos al vender ese producto (pág. 78) proﬁ t-maximizing output [nivel de producción de máxima ganancia] n. punto de la producción en el que una empresa ha alcanzado su mayor nivel de ganancias (pág. 143) proﬁ t motive [afán de lucro] n. incentivo que estimula a las personas y a las organizaciones para que mejoren su bienestar material buscando obtener ganancias de actividades económicas (pág. 73) progressive tax [impuesto progresivo] n. impuesto que aplica una tasa impositiva más alta a las personas de alta renta que a las personas de baja renta (pág. 412) property tax [impuesto sobre la propiedad] n. impuesto basado en el valor de los activos de una persona o de una empresa (pág. 412) proportional tax [impuesto proporcional] n. impuesto que extrae el mismo porcentaje de renta a todos los contribuyentes, independientemente de su nivel de renta (pág. 412) protectionism [proteccionismo] n.
uso de barreras al comercio entre los países para proteger las industrias nacionales (pág. 523) protective tariff [arancel proteccionista] n. impuesto aplicado a los bienes importados para proteger los bienes nacionales (pág. 521) public company [empresa que cotiza en Bolsa] n. sociedad anónima que emite acciones que pueden negociarse libremente (pág. 238) public disclosure [divulgación pública] n. política que exige que las empresas revelen a los consumidores información sobre sus productos (pág. 217) public goods [bienes públicos] n. bienes y servicios proporcionados por el gobierno y consumidos por el público como grupo (pág. 84) public transfer payment [pago de transferencia público] n. pago de transferencia por el que el gobierno transﬁ ere ingresos de los contribuyentes a los beneﬁ ciarios sin que éstos den nada a cambio (pág. 89) pure competition [competencia pura] véase perfect competition [competencia perfecta] Q quota [cuota] n. límite sobre la cantidad de un producto que puede importarse (pág. 520) R rational expectations theory [teoría de las expectativas racionales] n. teoría según la cual las personas y las empresas prevén que los cambios en la política ﬁ scal tendrán efectos determinados y actúan para proteger sus intereses contra esos efectos (pág. 452) rationing [racionamiento] n. sistema en el que el gobierno asigna bienes y servicios aplicando factores distintos al precio (pág. 183) real GDP [PIB real] n. producto interior brut
pág. 279) risk [riesgo] n. posibilidad de sufrir pérdidas en una inversión (pág. 327) S safety net [red de protección] n. programas gubernamentales diseñados para proteger a las personas de las diﬁ cultades económicas (pág. 89) sales tax [impuesto sobre las ventas] n. impuesto basado en el valor de los bienes o los servicios en el momento de la venta (pág. 412) savings [ahorros] n. ingresos que no se utilizan para el consumo (pág. 318) scarcity [carencia] n. situación en la que los recursos no son suﬁ cientes para satisfacer los deseos humanos (pág. 4) seasonal unemployment [desempleo estacional] n. desempleo asociado al trabajo estacional (pág. 384) secondary market [mercado secundario] n. mercado en el que los activos ﬁ nancieros se venden de nuevo (pág. 322) service [servicios] n. trabajo que una persona realiza para otra a cambio de un pago (pág. 5) shadow economy [economía sumergida] véase underground economy [economía subterránea] share [acción] n. unidad del conjunto de acciones de una sociedad anónima (pág. 238); véase stock [acciones] shock therapy [terapia de choque] n. programa económico en el que se pasa abruptamente de una economía autoritaria a una economía de libre mercado (pág. 563) shortage [escasez] n. situación en la que la demanda es mayor que la oferta y la causa suele ser la ﬁ jación de precios excesivamente bajos (pág. 167) shoulder surﬁ ng [navegar por el hombro] n.
técnica utilizada por los ladrones de identidad para recoger información personal cuando se revela información privada en público (pág. 588) socialism [socialismo] n. sistema económico en el que el gobierno posee algunos o todos los factores de producción (pág. 43) Social Security [Seguridad Social] n. programa federal que proporciona ayuda a los ciudadanos mayores, a los niños huérfanos y a los incapacitados (pág. 423) sole proprietorship [empresa unipersonal] n. empresa que pertenece a una sola persona y que es controlada por esa persona (pág. 226) spamming [spamming] n. técnica utilizada por los ladrones de identidad para recoger información personal mediante correos electrónicos engañosos (pág. 588) special economic zone (SEZ) [zona económica especial (ZEE)] n. región geográﬁ ca que tiene leyes económicas diferentes de las leyes económicas normales de un país, con el objetivo de aumentar las inversiones extranjeras (pág. 567) specialization [especialización] n. situación en la que las personas o las empresas centran sus esfuerzos comerciales en los campos en que presentan una ventaja para una mayor productividad y mayores ganancias (págs. 50, 138, 510) spending multiplier effect [efecto multiplicador de los gastos] n. situación en la que un pequeño cambio en los gastos acaba produciendo un cambio mucho más grande en el PIB (pág. 455) stabilization programs [programas de estabilización] n. programas en los que los países en diﬁ cultades se ven obligados a realizar reformas, como reducir el dé�
�� cit comercial exterior y el endeudamiento externo, eliminar los controles de precios, cerrar las empresas públicas ineﬁ cientes y bajar radicalmente el déﬁ cit presupuestario (pág. 559) stagﬂ ation [estanﬂ ación] n. períodos durante los que suben los precios a la vez que se reduce la actividad económica (pág. 359) standardized product [producto estandarizado] n. producto que los consumidores consideran idéntico en todas sus características esenciales a otros productos del mismo mercado (pág. 192) standard of value [patrón de valor] n. forma de medir el valor económico en el proceso de cambio de divisas (pág. 289) start-up costs [costos de puesta en marcha] n. gastos que una nueva empresa debe pagar para entrar en un mercado y empezar a vender a los consumidores (pág. 209) state bank [banco estatal] n. banco autorizado por el gobierno de un estado (pág. 296) statistics [estadísticas] n. datos numéricos (pág. 24) stock [acciones] n. participaciones en la propiedad de una sociedad anónima (pág. 238) stockbroker [agente de bolsa] n. agente que compra y vende valores para los clientes (pág. 332) stock exchange [bolsa de valores] n. mercado secundario donde se venden y compran valores (pág. 330) stock index [índice bursátil] n. instrumento utilizado para medir e informar sobre el cambio en los precios de un conjunto de acciones (pág. 334) stored-value card [tarjeta de valor almacenado]
n. tarjeta que representa dinero que el titular tiene en forma de depósito con la compañía emisora (pág. 308) Spanish Glossary R57 store of value [depósito de valor] n. algo que conserva su valor con el paso del tiempo (pág. 289) strike [huelga] n. paralización del trabajo utilizada para ejercer presión en las negociaciones mientras se trata de convencer al empleador de que mejore los salarios, las condiciones laborales u otros asuntos relacionados con el trabajo (pág. 274) structural unemployment [desempleo estructural] n. desempleo que existe cuando los puestos de trabajo disponibles no se corresponden con las aptitudes de las personas en condiciones de trabajar (pág. 384) subsidy [subsidio] n. pago gubernamental que ayuda a cubrir el costo de una actividad económica que puede beneﬁ ciar al público en su conjunto (pág. 88) substitutes [sustitutos] n. productos que se pueden usar en lugar de otros productos, para satisfacer los deseos de los consumidores (pág. 112) substitution effect [efecto sustitución] n. patrón de comportamiento que se presenta cuando los consumidores, al reaccionar ante un cambio en el precio de un producto, compran un producto sustitutivo que ofrece un mejor valor relativo (pág. 107) supply [oferta] n. disponibilidad y capacidad para producir y vender un producto (pág. 130) supply curve [curva de la oferta] n. gráﬁ ca que muestra los datos de una tabla de oferta (pág. 134) supply schedule [tabla de oferta] n. tabla que muestra la cantidad de un
bien o de un servicio que un productor individual puede y está dispuesto a ofrecer para su venta a cada precio (pág. 132) supply-side ﬁ scal policy [política ﬁ scal sobre la oferta] n. plan diseñado para ofrecer incentivos a los productores para que aumenten la oferta agregada (pág. 458) surplus [excedente] n. situación en la que la oferta es mayor que la demanda y la causa suele ser la ﬁ jación de precios excesivamente altos (pág. 167) T tariff [arancel] n. cargo aplicado a los bienes transferidos a un país procedentes de otro país (pág. 521) tax [impuesto] n. pago obligatorio a un gobierno (pág. 410) taxable income [renta gravable] n. aquella parte de la renta sujeta a impuestos después de descontar todas las deducciones y exenciones (págs. 421, 604) tax assessor [asesor ﬁ scal] n. funcionario gubernamental que determina el valor de una propiedad sujeta a impuestos (pág. 437) tax base [base imponible] n. forma de riqueza, como la renta, la propiedad, los bienes o los servicios, que está sujeta a impuestos (pág. 412) tax incentive [incentivo ﬁ scal] n. uso de impuestos para estimular o desalentar ciertos comportamientos económicos (pág. 417) tax return [declaración de la renta] n. formulario utilizado para declarar la renta y los impuestos que deben pagarse al gobierno (pág. 421) technological monopoly [monopolio tecnológico] n. monopolio que existe debido a que una empresa controla un
método de fabricación, un invento o un tipo de tecnología (pág. 201) technology [tecnología] n. aplicación de métodos e innovaciones cientíﬁ cos a la producción (pág. 149) telecommuting [trabajo a distancia] n. práctica de realizar el trabajo de oﬁ cina en un lugar distinto a la propia oﬁ cina (pág. 270) telework [teletrabajo] véase telecommuting [trabajo a distancia] temp, temps, temping [trabajo temporal] véase contingent employment [empleo contingente] thrift institution [entidad de ahorros] n. institución ﬁ nanciera que sirve a los ahorradores (pág. 478) tight-money policy [política de dinero escaso] véase contractionary monetary policy [política monetaria restrictiva] total cost [costo total] n. suma de los costos ﬁ jos y variables (pág. 140) total revenue [ingreso total] n. ingreso que recibe una empresa al vender sus productos (págs. 122, 142) total revenue test [prueba del ingreso total] n. método para medir la elasticidad comparando el ingreso total que obtendría una empresa al ofrecer su producto a diferentes precios (pág. 122) trade barrier [barrera al comercio] n. toda ley aprobada para limitar el libre comercio entre los países (pág. 520) trade deﬁ cit [déﬁ cit comercial] n. balanza de comercio desfavorable que se produce cuando un país importa más de lo que exporta (pág. 529) trade-off [compensación] n. alternativa que se rechaza al tomar una decisión económica (pág. 14) trade surplus [superá
vit comercial] n. balanza de comercio favorable que se produce cuando un país exporta más de lo que importa (pág. 529) trade union [sindicato] véase labor union [sindicato laboral] trade war [guerra comercial] n. serie de barreras al comercio entre los países (pág. 522) R58 Spanish Glossary trade-weighted value of the dollar [valor ponderado del dólar] n. medida del valor internacional del dólar que determina si el dólar es fuerte o débil al compararse con otra divisa (pág. 528) traditional economy [economía tradicional] n. sistema económico en el que las personas toman decisiones económicas basándose en costumbres y creencias que se han pasado de una generación a la siguiente (pág. 38) transfer payment [pago de transferencia] n. dinero enviado a personas que no dan bienes o servicios a cambio. (págs. 89, 432) transitional economy [economía transicional] n. país que ha pasado (o está pasando) de una economía autoritaria a una economía de mercado (pág. 545) Treasury bill (T bill) [letra del Tesoro] n. bono a corto plazo cuyo vencimiento es de menos de un año (pág. 464) Treasury bond [bono del Tesoro a largo plazo] n. bono a largo plazo cuyo vencimiento es de 30 años (pág. 464) Treasury note [pagaré del Tesoro] n. bono a medio plazo cuyo vencimiento es de entre dos y diez años (pág. 464) trough [punto mínimo] n. ﬁ n de una contracción de la economía (pág. 359); véase business cycle [ciclo económico
] trust [grupo de empresas] n. grupo de compañías que se combinan para reducir la competencia en una industria (pág. 214) trust fund [fondo ﬁ duciario] n. fondo creado para un ﬁ n determinado y para un uso futuro (pág. 465) U underemployed [subempleados] n. personas que trabajan a tiempo parcial pero que quieren trabajar a tiempo completo, o personas que tienen un trabajo que requiere una capacidad inferior a la suya (pág. 383) underground economy [economía subterránea] n. actividades de mercado que no se declaran por ser ilegales o porque los participantes quieren evitar pagar impuestos (pág. 354) underutilization [infrautilización] n. condición en la que los recursos económicos se usan por debajo de su potencia total, dando lugar a menos bienes y servicios (pág. 20) unemployment rate [tasa de desempleo] n. porcentaje de la fuerza laboral que no tiene empleo y que está buscando activamente un trabajo (pág. 382) union [sindicato] véase labor union [sindicato laboral] union shop [compañía de exclusividad sindical] n. empresa en la que los trabajadores están obligados a asociarse a un sindicato durante un período de tiempo establecido después de ser contratados (pág. 279) unit elastic [elasticidad unitaria] n. situación en la que el cambio porcentual del precio y el de la cantidad demandada son iguales (pág. 118) unlimited liability [responsabilidad ilimitada] n. situación en la que el propietario de una empresa es responsable de todas las pérdidas y deudas de la em
presa (pág. 228) unlimited life [vida ilimitada] n. situación en la que una sociedad anónima continúa existiendo aun después de un cambio de propietario (pág. 240) user fee [cargo de usuario] n. cantidad de dinero que se cobra por el uso de un bien o servicio (pág. 425) utility [utilidad] n. beneﬁ cio o satisfacción obtenido del consumo de un bien o un servicio (pág. 12) V variable costs [costos variables] n. costos comerciales que varían con el nivel de producción (pág. 140) vertical merger [fusión vertical] n. combinación de dos o más empresas relacionadas con diferentes fases de la producción o de la comercialización de un producto o un servicio (pág. 243) voluntary exchange [intercambio voluntario] n. intercambio en el que las partes participantes prevén que los beneﬁ cios serán más importantes que el costo (pág. 49) voluntary export restraint (VER) [retricción voluntaria a la exportación (RVE)] n. autolimitación sobre las exportaciones a ciertos países para evitar cuotas o aranceles (pág. 521) W wage and price controls [controles de precios y salarios] n. limitaciones gubernamentales sobre el aumento de los precios y los salarios (pág. 501) wage-price spiral [espiral de precios y salarios] n. ciclo que empieza con el aumento de los salarios, lo cual da lugar a costos de producción más altos, que a su vez produce precios más altos; esto provoca la demanda de salarios incluso más altos (pág. 400) wage rate [escala de salarios] n. salario establecido para un determinado pu
esto de trabajo o tarea realizada (pág. 261) wages [salarios] n. pagos que reciben los trabajadores a cambio de su trabajo (pág. 258) wants [deseos] n. deseos que pueden satisfacerse mediante el consumo de un bien o un servicio (pág. 4) welfare [asistencia social] n. programas económicos y sociales del gobierno que proporcionan ayuda a los necesitados (pág. 392) Spanish Glossary R59 withholding [retención] n. dinero descontado del pago de un trabajador antes de que reciba ese pago (pág. 421) workfare [programa de empleo público] n. programa que obliga a los beneﬁ ciarios de la asistencia social a realizar algún tipo de trabajo a cambio de sus beneﬁ cios (pág. 393) World Bank [Banco Mundial] n. institución ﬁ nanciera que proporciona préstamos, consejos relacionados con la política y ayuda técnica a países de ingresos bajos o medios, para reducir la pobreza (pág. 559) World Trade Organization (WTO) [Organización Mundial del Comercio (OMC)] n. organización que negocia y gestiona acuerdos comerciales, resuelve conﬂ ictos comerciales, supervisa las políticas comerciales y apoya los países en vías de desarrollo (pág. 535) Y yield [rendimiento] n. tasa de rentabilidad anual sobre un bono (pág. 338) R60 Spanish Glossary Index I n d e x Page numbers in bold indicate that the term is deﬁ ned on that page. Page numbers in italics indicate an illustration. A letter after a number indicates a speciﬁ c
kind of illustration: c – chart; i – photograph; m – map. An a after an italicized page number indicates an Animated Economics feature. A ability-to-pay taxation, 411 absolute advantage, 512, 513, 519 Adidas, 244 advertising and consumer tastes, 111 dot-com products, 345 Animated Economics, 19a, 20a, 22a, 26a, 53a, 80a, 100a, 102a, 108a, 109a, 118a, 132a, 134a, 147a, 148a, 155a, 165a, 169a, 243a, 260a, 361a, 415a, 449a, 495a, 517a annual percentage rate (APR), 582–584, 585 normal/inferior goods, 110 averages, calculating, R3 B Bakal, Abe, 92 balanced budget, 436 antitrust legislation, 214–215 balance of payments, 529 Advisory Councils, Federal, 478 apartments, ﬁ nding, 608–609 balance of trade, 529–530 AFL-CIO, 276, 279 APEC, 535 aggregate demand, 360–361 appropriations, 431 Baldwin, James, 389 Baltic Republics, 565 curve, 360, 360a, 403 Archer Daniels Midland (ADM), 216 banana production, 511 demand-side economics and, 454–457 ﬁ scal policy and, 446, 448–450 inﬂ ation and, 452 aggregate supply, 360–361, 403 agricultural productivity, 374, 544, 550 aid, ﬁ nancial, 593, 593–595 aid, foreign, 559 Airline Deregulation Act of 1978, 218 allocation, resource, 3–9, 11, 38, 7881, 416, 432 Amazon.com, 75 American Federation of Labor (AFL), 275–276 American Federation of State, County, and Municipal Employees (AFSCME), 278–279 American Railway Union, 276 American Stock Exchange (AMEX), 332 Angola, 547 Archipelago Exchange, 332 Argentina, 289, 560 Bangladesh, A15 bank, 301 Ariel Capital Management, 326 central, 474–475, 478 Armenia, 565 ASEAN, 534 Ash, Mary Kay, 230, 230i Asia-Paciﬁ c Economic Cooperation (APEC) group, 535 assets, ﬁ nancial, 319, 322. See
366, 359, 366 aggregate supply and demand, 360–361 ﬁ scal policy and, 451, 451 historical, 365–366 monetary policy and, 496, 503 predicting, 364 stages of, 358–359 unemployment and, 385 businesses, 52–53, 53 business organizations, 225–250 advantages and disadvantages, 242 cooperatives, 250 corporations, 238–242, 239, 240, 243–245 franchises, 93, 248, 248–249 mergers, 214–215, 243–244, 243a, 247, 306, 306–307 nonproﬁ t organizations, 250 partnership, 232–235, 234, 237 car. See also automobile industry. buying a, 590–591 insurance, 516, 517 career change, 271 career counseling, 600 caricature, 114 cartel, 198, 535 cartoon, political, 33, 61, 114, 159, 204, 214, 218, 221, 241, 244, 283, 287, 298, 313, 317, 331, 335, 341, 345, 358, 365, 377, 405, 411, 423, 436, 452, 462, 469, 475, 505, 520, 543, 564, 570, 571, 582, 594, 598, R26 case studies Apple Inc., 252–253 automobile demand, 124–125 China, 570–571 entrepreneurs, 92–93 federal deﬁ cit, 468–469 Federal Reserve System, 504–505 inﬂ ation, 404–405 Internet companies, 344–345 bear market, 335 Becker, Gary, 264, 264i beef, 195, 522 Belarus, 565 Belgium, 547 beneﬁ ts-received taxation, 411 Bernanke, Ben, 504–505, 504i Beveridge, Sir William, R27 binding arbitration, 280 Black Entertainment Television (BET), 152 black market, 183–184, 354 blue chip stocks, 335 Board of Governors, 476–477 Bombay Stock Exchange (BSE), 336 bonds, 240, 338–340, 580 government, 339, 464, 482, 490 interest rates and, 340 ratings, 340, 340 risk and return, 327, 583 Treasury, 339, 464, 583 types of, 338–339 Bono, 523, 523i booksellers, 74–75 borrowing, 319. See also loans. costs of, 583 inﬂ ation and, 402 Botswana,
49, 449–450, 457, 500, 500 contractionary monetary policy, 492–493, 500, 500 contracts, 432, 598–599 contrasting, 56, 64–65 cooperative, 250 co-pay, 596 corn, 195 corporate bond, 339, 579 corporate income tax, 412, 424, 424, 435 corporation, 238–242, 239, 240, 243–245 corruption index, 557, 557 cosigner, 583 Costa Rica, 511 cost-beneﬁ t analysis, 13, 15–16, R18 education, 593 energy, 373 ﬁ xed/variable, 140 input, 148 databases, R11, R31 De Beers cartel, 198–199 debit card, 308–309, 486, 577, 585 Debs, Eugene V., 276 marginal, 16, 140–141 debt opportunity, 12–17, 21, 512–513 investment and, 325, 579 production, 140–143 and revenues, 145 total, 140 Council of Economic Advisers, 452 coupon rate, 338 cover letter, 601–602 craft union, 274–273 credit, 582–589 identity theft and, 588–589 reports, 586–587, 587 score, 586 types of, 582–585 credit card, 305, 309, 582, 584–585 credit-rating company, 340 credit union, 302 creeping inﬂ ation, 398 crowding-out effect, 466–467, 467 cultural exception, 524 currency, 293, 475, 478, 483, 483. See also money. exchange rates and, 526–528, 531 stability, 555, 555i strong and weak, 528 curves. See graphs. customs duty, 425 customs union, 532 cyclical unemployment, 384–385 Czech Republic, 565 D Dahl, Gary, 73–74 less developed countries and, 559 debt restructuring, 559, 560 decimals, R2 decision-making, 15, 15–16, 439, 568, R17, R22 deductible, 596 deduction, tax, 421, 421 default, 559 deﬁ cit budget, 462, 463 federal, 462–464, 468–469 trade, 529, 530, R21 deﬁ cit spending, 462–464, 466, 466, 468–469 de�
� ation, 398 Dell, Michael, 178, 178i demand, 97–122. See also price; supply. aggregate, 360–361, 403, 446, 448–450, 452, 454–457 demand-pull inﬂ ation, 399, 399, 449 derived, 259 elastic/inelastic, 116–122, 117, 415, 415a factors affecting, 106–113, 113, 115 labor, 258–259 law of, 99, 99 for money, 486, 487, 489 price and, 99, 116–117, 164–165, 169–171, 169a, 171, 487 supply and, 164–171 demand curve, 102–103, 102a, 103, 105–111, R15 aggregate, 360, 360a, 403 elastic/inelastic, 118a cost-push inﬂ ation, 399–400 costs, 13. See also price. data, 24–26, R14, R23, R31. See also graphs. R64 Index I n d e x labor, 259 355 economic investment, 318 supply curve and, 166, 166, 337 diversiﬁ cation, 327–328 economic models, 18, 24–25, 196, R16 demand deposits, 293 dividends, 238, 330–331 economics, 3, 4 demand-pull inﬂ ation, 399, 399, 449 dollar, 289, 292, 528, 528 demand schedule, 100–101, 100a, 101, 165, 165a dot-coms, 344–345 double taxation, 242, 424 microeconomics and macroeconomics, 27–28, 28 positive and normative, 29 demand-side ﬁ scal policy, 454–457, 458 democracy, 544 Dow Jones Industrial Average (DJIA), 334, 334–336, 335 Economics of Discrimination, The, 264 democratic socialism, 43 Doyle, Jim, 440 demographic trends, 390 drug manufacturer, 204 Deng Xiaoping, 566–567, 570 dumping, 521 Department of Justice, 215 dumpster diving, 588 dependent, 608 deposit expansion multiplier, 485 deposit multiplier formula, 485 E earned-income tax credit, 392 depreciation, 590 depression, 359 Depression, Great, 300, 365, 398, 454, 457, 463 deregulation, 218, 300, 306, 458 derived demand, 259 de Soto, Hernando, 394,
394i developed nation, 544–545 development. See economic development. development assistance, 25, 25 diamond market, 198–199 differentiated products, 206–207, 209–210, 212 diminishing marginal utility, law of, 106–107, 107 diminishing returns, 139 direct investment, 558 discount rate, 491 discretionary ﬁ scal policy, 446 discretionary spending, 428, 430 discrimination, 262, 390 disequilibrium, 169 Disney, R18 disposable personal income (DPI), Eastern Europe, 565 Eastman Kodak Company, 202 easy-money policy, 492, 498-499, 499 economic concepts, R13 economic cycle. See business cycle. economic development, 543–567 capital and, 552–553 categorizing, 561 ﬁ nancing, 558 levels of, 544–545, 551 market economy and, 562–567, 569 opportunity and, 556–557 stability and, 554–555 standards of, 546–550 economic growth, 22, 358, 368–375, 556 economic indicators, 349–374 business cycles, 358–366, 359, 366 gross domestic product (GDP), 65, 350–354, 351, 352, 356 types of, 364, 364 economic institutions. See business organizations. economic interdependence, 510–511 Economics of Imperfect Competition, The, 212 Economics Update, 5, 25, 30, 32, 39, 44, 54, 62, 64, 71, 76, 81, 92, 99, 104, 111, 119, 124, 131, 152, 158, 165, 178, 182, 186, 193, 203, 207, 210, 212, 216, 220, 227, 230, 234, 240, 246, 252, 259, 264, 267, 278, 282, 289, 294, 297, 301, 312, 318, 325, 326, 334, 344, 351, 362, 369, 374, 376, 383, 389, 394, 397, 404, 411, 422, 426, 429, 434, 440, 447, 456, 465, 468, 475, 482, 494, 504, 511, 512, 518, 530, 538, 545, 556, 560, 567, 570, 588, 593 economic systems, 37–62 command economy, 39, 42–46, 54, 56, 562–564 global
62–464, 468–469 Federal Reserve and, 482–483 securities, 339, 464, 482, 490 expansionary ﬁ scal policy, 446, 448, 449, 452, 498–499, 499 spending, 428–432 taxes, 420–426, 425 expansionary monetary policy, 492, 498–499, 499 Federal Insurance Contributions Act (FICA), 423 expenses, personal, 574–575 exports, 516–517, 517 balance of trade and, 529–530 exchange rates and, 528 intraﬁ rm, 536 net, 351–352 voluntary export restraint (VER), 521 externality, 87–88, 91 Federal Open Market Committee (FOMC), 477–478, 482 Federal Reserve System, 300, 474–496 currency, 483, 483 districts, 477m, 479 duties of, 474–475 government and, 482–483 member banks, 477 monetary policy and, 490–502 money and, 475, 484, 484–487, 490–496 structure of, 476, 476–478 U.S. Treasury and, 488 Federal Trade Commission (FTC), 215, 217, 589 ﬁ at money, 291–292 entrepreneurship, 9, 92–93, 93 Environmental Protection Agency (EPA), 217 environmental tax, 426 Epson, 159 equilibrium price, 164–171, 167, 173, 189 F factor market, 52–53, 80, 81 factors of production, 8–9, 9, 510 facts, 236, R27 FAFSA, 594–595 Fair Labor Standards Act, 263, 276 business cycles and, 361 famine, 554 R66 Index I n d e x FICA, 423 ﬁ ling status, 604 ﬁ lm industry, 209 ﬁ nance charge, 582–583 ﬁ nance company, 320 ﬁ nancial asset, 319, 322 ﬁ nancial intermediary, 319–321 ﬁ nancial markets, 317–341, 319 assets in, 319, 322 ﬁ nancial system, 318–322, 319 personal investing in, 324–328 productivity and, 373 stocks, 330–336 types of, 322–323 Financial Services Act of 1999, 307 ﬁ nancial system, 318–322, 319 ﬁ reworks displays, 85 ﬁ rm
closures, 71 First Bank of the United States, 297 ﬁ scal policy, 446–466, 450 contractionary, 446, 449, 449–450, 457, 500, 500 demand-side, 454–457 discretionary, 446 expansionary, 446, 448, 449, 452, 498–499, 499 federal deﬁ cit and, 462–464 interest rates and, 499–500 limitations of, 451–452 monetary policy and, 498–502, 502 national debt and, 465–466 supply-side, 458, 458–460 taxation and, 448, 450, 458–460 types of, 446–450, 460–461 ﬁ scal year, 431 ﬁ xed cost, 140 ﬁ xed investment, 351 ﬁ xed rate of exchange, 526–527 ﬂ at tax, 412 ﬂ exible rate of exchange, 527 Flintoff, Andrew, R22 G galloping inﬂ ation, 398 ﬂ oating rate, 527 ﬂ ow chart, R17 focus group, 208 Food and Drug Administration (FDA), 217 food production, 79, 79, 374, 374 food stamp program, 392, 429, 482 Gartner, Inc., 221 gasoline, 155 gas station, 269i Gates, Bill, 246, 246i GDP. See gross domestic product (GDP). General Agreement on Tariffs and Trade (GATT), 524, 535 Ford Motor Company, 62, 277 General Electric (GE), 245, 335 foreign exchange market, 526–528 generalizing, R24 foreign exchange rate, 526–528 foreign investment, 61, 558 General Motors Corporation, 124, 276–277, 382 foreign sector, 352 Form 1040, 604–606, 606 401(k) plan, 580 fractional reserve banking, 296, 305, 305a general partnership, 233 General Theory of Employment, Interest, and Money, 456 generic drug, 204 geographic monopoly, 201, 203 France, A15, 59, 524 franchise, 93, 248, 248–249 franchisee, 248 Franklin, Benjamin, 604 Free Application for Federal Student Aid (FAFSA), 594–595 free contract, 73, 74 free enterprise sector, 84 Germany, A15 gift tax, 425 glass ceiling, 262 global economy, 61–63 globalization, 244–245,
269. See also international trade. gold standard, 299, 526–527 Gompers, Samuel, 275 free enterprise system, 69–90 goods, 5 competition and, 72, 75 government and, 72, 80–81, 84–90 legal rights and, 74i modiﬁ ed, 80–81 free market, 30, 54 free rider, 85–86 Free to Choose, 76 free-trade zone, 532 frictional unemployment, 384 Friedman, Milton, 76, 76i, 496 full employment, 383 futures, 333 consumption of, 548, 548–549 ﬁ nal/intermediate, 350, 357 normal/inferior, 110, 177 public, 84–85 Google, 244 Gorbachev, Mikhail, 564 government. See also ﬁ scal policy; monetary policy; regulation; taxation. banking and, 306–307 bonds, 339, 464, 482, 490 command economies and, 39, 42–46 competition and, 432 Index R67 contract, 432 greenback, 299 Hungary, 565, 569 demand-side policy and, 457 Greenspan, Alan, 477, 494, 494i, 504 Hurricane Katrina, 363, 486 gross domestic product (GDP), 65, 350–354, 351, 356 hybrid automobile, 125 hyperinﬂ ation, 398 economic growth and, 375 Federal Reserve System and, 483–483 ﬁ nancial insurance and, 320, 341 free enterprise and, 72, 80–81, 84–90 laissez faire capitalism and, 49 market economies and, 55 mergers and, 215 monopoly, 201–202 national debt and, 465, A14, A15 nominal, 352, 352–353 per capita, A11m, A15, 369, 546, 546, 557 real, 352, 352–353, 358–361, 364, 368–373, 369 United States, A12 payroll and consumption, 81, 81 gross national product (GNP), 355 private sector and, 432, 466 Gulf and Western, 244 production costs and, 149–150 revenue, 410–411, 420–426, 425 securities, 339, 464, 482, 490 spending, 351–352, 428–433, 448–450, 456–457, 463 stability and, 554 state and local, 434–438 H hacking, 588–589 Hagen, Ralph,
422, 447, R7 state, 435, 435 increasing returns, 139 independent contractor, 270 indexing, tax, 422 human capital, 8, 261, 264, 371, 552–553 human development index (HDI), 547, 569 India, A15, A16, 282, 385, 548, 549, R20 individual income tax, 412, 420–422 individual retirement account (IRA), 580 Indonesia, A15 industrialization, 55 compounding, 585 objective, 324–325, 347 on savings, 587–579, 581, 581 online information about, 342 Industrial Revolution, 44, 371 interest rates industrial union, 274 bond prices and, 340 options, 579 overseas, 336 inelastic demand, 117–118, 415, 415a business cycles and, 363 personal, 318, 324–328, 578–581 I n d e x inelastic supply, 154–156 infant industries, 523 demand for money and, 486, 487 ﬁ scal policy and, 499–500 infant mortality rate, 547, 551 inﬂ ation and, 402 inferences, making, R21 loans and, 582–583, 583 inferior goods, 110 inﬂ ation, 289, 396–402 demand-pull, 399, 399, 449 effects of, 401–405 ﬁ scal policy and, 449–450, 457 income and, 401 indexing and, 422 interest rates and, 402 investment and, 327–328 monetary policy and, 495–496 national debt and, 465 oil supply and, 396, 400 rate, 397–398, 398 types of, 398–399 wage and price controls, 501, 563–564 information technology, 371 infrastructure, 86, 545, 562 initial public offering (IPO), 330 input costs, 148 insourcing, 269 Institute for Liberty and Democracy, 394 insurance banking and, 307 ﬁ nancial, 320, 341 types of, 596–597, 597 Integrated Device Technology, 62 interest, 304–305, 578 calculating, 321, R6 risk and return, 327, 327–329, 338–340, 579, 579 spending multiplier effect and, 455 stability and, 555 U.S. Treasury bonds, 464 Iran, A15, 524 monetary policy and, 495, 495–496, 499–500 Internal Revenue Service
, 305 demand for, 487, 489 Federal Reserve System and, 475, 484, 484–487, 490–496 ﬁ at, 291–292 functions of, 288–289, 289, 295 inﬂ ation and, 399 M1 and M2, 486 order, 482 properties of, 290 types of, 291–293 mergers, 214, 243–244, 243a, 247 money management, 574–581 bank, 306, 306–307 government and, 215 Mexican peso, 526i Mexico, A15, 72, 533–534 microeconomics, 27–28, 28 Microsoft, 246 Milanesi, Carolina, 221 military bases, 433 Miller, Darlene, 283 budgeting, 574–575 checking accounts, 576–577 credit, 582–589 paying taxes, 604–607 saving and investing, 578–581 money market, 322 money market account, 578 money market mutual fund (MMMF), 341 minimum balance requirement, 576 minimum wage, 182, 182, 262–263 monopolistic competition, 206–208, 211–212 N NAFTA, 533, 533–534, 537 Namibia, 40, 60 NASDAQ, 333 NASDAQ Composite, 334 national accounts, 350, 355 National Association of Securities Dealers (NASD), 333 national bank, 297, 299 National Basketball Association (NBA), 136 National Bureau of Economic Research (NBER), 365 National Credit Union Association (NCUA), 302 national debt, A14, A15, 462, 465, 465–466 national defense, 85, 430 National Farm Workers Association (NFWA), 277 National Foundation for Credit Counseling, 587 Index R71 national income accounting, 350, 355 not-for-proﬁ t organization, 250 Pearl Jam, 186 national income (NI), 355 nationalization, 61 National Labor Relations Act, 276 O occupational segregation, 262 National Labor Union (NLU), 275 offshore outsourcing, 385 pension fund, 320–321 People’s Bank of China (PBC), 478 per capita GDP, A11m, A15, 369, 546m, 546, 557, percentages, calculating, 60, R2, R4 national parks, 425 natural monopoly, 201 Ohio, 523 oil supply, 10, 200, 363, 370, 396, 400 perestroika, 564–565 natural resources, A4m,
factors of, 8–9, 9, 510 marginal product, 138–139 production costs schedule, 141, 141–143, 143 production possibilities curve (PPC), 18–22, 22a, 23 producer price index, 397 guns vs. butter, 20–21, 20a stability, 555 shift in, 22, 22a supply and, 131, 170, 170–171, 171 productivity, 149, 372–373 system, 174–175, 175 tariffs and, 522, 522 price ceiling, 180–181 price ﬂ oor, 182, 185 professional sports, 203 professional worker, 261 proﬁ t, 49, 54–55, 78, 136, 142–143 proﬁ t-maximizing output, 143, 204 proﬁ t motive, 73 progressive tax, 412, 413, 414, 421–422, 447, R7 property, 48 property rights, 555 property tax, 412, 425, 437, 438 proportional tax, 412–413, 414 protectionism, 523–524, 556 protective tariff, 515, 521 public company, 238 public disclosure, 217 public goods, 84–85, 463 public opinion polls, 82 public safety, 436, 438 public schools, 438 public sector, 84, 86 public transfer payment, 89, 89–90, 447 public welfare, 436, 438 Pudliszki, R17 purchasing power, 289–290 pure competition, 192–195, 194, 197, 211 Putin, Vladimir, 564 Q quality of life, 354 quota, 520 R Ramirez, Monica, 70–71, 70i rational expectations theory, 452, 498–499, 501 rationing, 183, 183–184 ratios, using, R5 reading strategies active reading, S4 previewing, S2–S3 reviewing and summarizing, S5 Index R73 Reagan, Ronald, 365, 401, 494 Social Security and, 429 real capital, 8 real GDP, 352, 352–353, 353, 358–361, 364 return on investment, 327–329, 583, 583 Reuther, Walter Philip, 277 economic growth and, 368–373 revenue, 410. See also taxation. per capita, 369, 369 recession, 359, 451, 493 recording industry, 362 corporations and, 240 federal, 410–411, 420–426, 425 sole proprietorships and, 229 redistribution of income, 89–
38, 58, 70, 78, 84, 98, 116, 130, 154, 164, 192, 238, 258, 288, 330, 358, 382, 396, 410, 420, 446, 474, 526, 552, 562 comparison and contrast chart, 206c, 232c, 462c concepts chart, 24c, 48c, 106c, 146c, 174c, 198c, 226c, 296c, 324c, 338c, 434c, 454c, 480c, 510c, R13 hierarchy chart, 42c, 138c, 180c, 214c, 266c, 304c, 318c, 352c, 428c, 490c summary chart, 18c, 248c, 274c, 368c, 388c, 532c, 544c, R26, R27 R76 Index Uniform Partnership Act (UPA), 235 trade balance, 530, 530, R21 unions. See labor unions. unemployment rates, 383, 386 union shop, 279 United Autoworkers Union (UAW), 276–277 union membership, 278 world economy and, A15, 518 United States maps I n d e x international organizations, 532– 536, 534m specialization and, 514 trade barrier, 520–524 trade deﬁ cit, 529, 530, R21 trade-off, 14 trade surplus, 529 United Farm Workers, 277 United Kingdom, 61, R19 trade unions. See labor unions. United Mine Workers, 277 trade war, 522 trade weighted dollar, 528 traditional economy, 38, 40 transactions money, 293, 486 transfer payment, 89–90, 352, 432, 447, 482 United Nations Development Program (UNDP), 559 United States antitrust legislation, 214–215 automobile industry, 124–125 banking in, 296–302, 365 transitional economy, 545 China and, 529, 529 consumer price index, 397 employment, 268, 365–366, 517, A12–A13 energy use, 549 household income, A5m land use, A4m natural resources, A4m political, A2m–A3m population density, A5m unit elasticity, 118 unlimited liability, 228–229, 235 unlimited life, 240–241 unskilled worker, 261 U.S. Agency for International Development (USAID), 559 U.S. Department of Agriculture (USDA
201 Wealth of Nations, The, 30, 39 web diagram, R24 welfare, 90, 392–393 W-2 form, 605 W-4 form, 604, 604 Whaley, John, R18 wildcat banking, 298–299 Wilson, Woodrow, 299 withholding, 421 women in labor force, 267, 267, 556 wage discrimination and, 262 Wood, Ben, 221 Woodworm, R22 Woolcock, Keith, 65 wool production, 511 workfare, 90, 393 working conditions, 262, 270–271 work stoppage, 274, 280 World Bank, 559 world data table, A15 world maps GDP per capita, A11m land use, A9m natural resources, A8m political, A6m–A7m population density, A10m world markets, 336 world population, A16 World Trade Organization (WTO), 535 R78 Index Acknowledgments Text Acknowledgments Chapter 1, page 32: Excerpts from “O’Hare International Airport (ORD/ KORD), Chicago, IL, USA,” from the Airport-Technology Web site. Reprinted by permission of SPG Media Limited. Chapter 1, page 33: Excerpt from “Organization and Introduction,” from the AReCO Web site. Reprinted by permission of The Alliance of Residents Concerning O’Hare, Inc. (AReCO). Chapter 2, page 64: Excerpt from “The North Korean Famine,” from Peace Watch, June 2002. Reprinted by permission of the United States Institute of Peace. Chapter 2, page 65: Excerpt from “Masters of the Digital Age,” by Rana Foroohar and B. J. Lee, Newsweek, October 18, 2004. Copyright © 2004 Newsweek, Inc. All rights reserved. Reprinted by permission. logo are trademarks of Yahoo! Inc. Reprinted by permission of Yahoo! Inc. Chapter 11, page 342: “Apple Computer (AAPL-Q),” from The Globe and Mail, April 19, 2006. Reprinted by permission of the Globe and Mail Chapter 11, page 344: “Kozmo.com,” from the Wikipedia Web site. Reprinted by permission. Chapter 11, page 345: Excerpt from “The Bubble Bowl” by David M. Ewalt, Forbes Web site, January
27, 2005. Copyright © 2005 Forbes.com Inc. Reprinted by permission. Chapter 12, page 364: “U.S. Leading Economic Indicators (LEI) and Real GDP”. The Conference Board, United States Bureau of Economic Analysis, National Bureau of Economic Research. Reprinted by permission of The Conference Board Inc. Chapter 3, page 92: Excerpt from “The Industry: Message in a Bottle” by Matt Lee and Ted Lee, The New York Times, June 28, 2005. Copyright © 2005 by The New York Times Co. Reprinted with permission. Chapter 12, page 376: Excerpts from “Europe’s Capitalism Curtain” by Steve Pearlstein, The Washington Post, July 23, 2004. Copyright © 2004, The Washington Post. Excerpted with permission. Chapter 3, page 93: Excerpt from “Growing Occupation: Being Your Own Boss” by Stacey Hirsh, Baltimore Sun, April 21, 2006. Copyright © 2006 The Baltimore Sun. Reprinted by permission. Chapter 12, page 377: Excerpts from “Reaping the European Union Harvest,” The Economist, January 8, 2005. The Economist Newspaper Ltd. All rights reserved. Reprinted with permission. Further reproduction prohibited. www.economist.com. Chapter 4, page 124: Excerpts from “Volkswagen Tries 12 Months of Free Car Insurance to Lure Buyers” by Jeff Green, December 31, 2004, Bloomberg Web site. Copyright © 2004 Bloomberg L.P. All rights reserved. Reprinted by permission of Bloomberg L.P. Chapter 4, page 125: Excerpt from “2005 – The Year of the Hybrid,” from the InvoiceDealers Web site. Reprinted by permission of Dealix Corporation, a Division of The Cobalt Group. Chapter 5, page 144: Excerpt from “Why is the Supply of Cement Falling Short of Demand?” from the Portland Cement Association Web site. Reprinted by permission of the Portland Cement Association. Chapter 5, 158: Excerpts from “Robots for Babies: Toyota at the Leading Edge” by Burritt Sabin, Japan Inc. Web site. Reprinted by permission of Japan Inc. Chapter 5, page 159: Excerpt from “Cake Decorating” from the EPSON Robots Web site. Reprinted
by permission of EPSON America Inc. Chapter 6, page 187: Figure 1 from “The Economics of Real Superstars: The Market for Concerts in the Material World” by Alan B. Krueger, Journal of Labor Economics, 23(1), 2005. Reprinted by permission of The University of Chicago Press. Chapter 7, page 220: Excerpts from “Anyone for Telly?,” The Economist, September 10, 2005. The Economist Newspaper Ltd. All rights reserved. Reprinted with permission. Further reproduction prohibited. www.economist.com. Chapter 7, page 221: Excerpt from “Gartner Says Mobile Phone Sales Will Exceed One Billion in 2009,” from the Gartner Web site. Reprinted with permission. Chapter 8, page 248: “World’s Leading Franchises,” from Franchise Facts. Copyright © International Franchise Association. Reprinted by permission of the International Franchise Association. Chapter 8, page 252: Excerpt from “Steve Jobs and Steve Wozniak: The Personal Computer” from the Lemelson-MIT Program Web site. Courtesy of Inventor of the Week, Lemelson-MIT Program, http://web.mit.edu/invent. Chapter 8, page 253: Excerpts from “Interview with Evelyn Richards” by Wendy Marinaccio, appearing on the “Making the Mac/Technology and Culture in Silicon Valley” Web page, Stanford University Library. Reprinted by permission of the Stanford University Library. Chapter 8, page 253: “Highlights in Apple Company History” adapted from Apple timeline appearing in Macworld, February 2004. Copyright © 2004 Mac Publishing LLC. All rights reserved. Reprinted by permission. Chapter 8, page 255: “Mergers in the United States” MergerStat Review, 2004. Copyright © 2004 Mergerstat Holdings, LLP. Reprinted by permission of FactSet Mergerstat LLC. Chapter 9, page 282: Excerpt from “Subcontinental Drift” by Nandini Lakshman, Business Week, January 16, 2006. Copyright © 2006 by The McGraw-Hill Companies, Inc. Reprinted by special permission. Chapter 9, page 283: Excerpt from “Foreign Firms Come Bearing Jobs” by Mike Meyers, Star Tribune, September 5, 2004. Copyright © 2004 Star Tribune. All rights reserved. Reprinted by
permission of the Star Tribune, Minneapolis – St. Paul, Minnesota. Chapter 10, page 312: Excerpts from “Congress Cuts Funding for Student Loans” by Anne Marie Chaker, The Wall Street Journal, December 22, 2005. Copyright © 2005 The Wall Street Journal. Reprinted by permission. Chapter 10, page 313: Excerpts from “It’s Payback Time” by Jonathan D. Glater, The New York Times, April 23, 2006. Copyright © 2006 by The New York Times Co. Reprinted with permission. Chapter 11, page 334: “Dow Jones Industrial Average, 1929-2006,” from Yahoo! Finance Web site. Copyright © 2006 Yahoo! Inc. YAHOO! and the YAHOO! Chapter 13, page 404: Excerpt from “The Search for a New Economic Order” by Robert Tolles, Ford Foundation, New York, 1982, p. 24. Reprinted by permission of the Ford Foundation. Chapter 13, page 405: Excerpts from “Open Editorial” by Bernice Davidson, The New York Times, September 29, 1972. Copyright © 1972 by The New York Times Co. Reprinted with permission. Chapter 14, page 440: Excerpts from “iPod Tax Planned for Music Downloads?” from the CNET Web site, March 10, 2006. Copyright © 2006 CNET Networks, Inc. All rights reserved. Reprinted by permission of Reprint Management Services. Chapter 14, page 441: Excerpt from “Internet Sales Tax,” from The New York Times, July 5, 2005. Copyright © 2005 by The New York Times Co. Reprinted with permission. Chapter 15, page 468: Excerpts from “Federal Budget Deﬁ cit Sparks Worries,” The Associated Press, January 15, 2006. Copyright © 2006 The Associated Press. All rights reserved. Reprinted by permission of Reprint Management Services. Chapter 15, page 469: Excerpt from “Snow Sets Sights on Deﬁ cits” by Edward Alden, Andrew Balls, and Holly Yeaser, Financial Times, November 4, 2005. Copyright © The Financial Times Ltd. 2005. Reprinted with permission. Chapter 16, page 504: Excerpts from “Fed Expected to Boost Key Interest Rates,” The Associated Press, May 10, 2006.
Copyright © 2006 The Associated Press. All rights reserved. Reprinted by permission of Reprint Management Services. Chapter 16, page 505: Excerpts from “Bernanke Talks Tough on Inﬂ ation” by Edmund L. Andrews, The New York Times, June 6, 2006. Copyright © 2006 by The New York Times Co. Reprinted with permission. Chapter 17, page 521: “Tariffs are Falling,” from the Human Development Report, 2005, United Nations Development Programme. Reprinted by permission of the United Nations Publications Department. Chapter 17, page 538: Excerpt from “Sugar Daddies” by Jason Lee Steorts, National Review, July 18, 2005. Copyright © 2005 National Review. Reprinted by permission. Chapter 17, page 539: Excerpts from “Sweetener Impact on US Economy,” from the American Sugar Alliance Web site. Copyright © 2005 American Sugar Alliance. Reprinted by permission. Chapter 18, page 570: Excerpt from “From T-shirts to T-bonds,” The Economist, July 28, 2005. The Economist Newspaper Ltd. All rights reserved. Reprinted with permission. Further reproduction prohibited. www.economist.com. Chapter 18, page: Excerpts from “China’s Economic Miracle: The High Price of Progress,” from CBC News, April 20, 2006, Canadian Broadcasting Corporation Web site. Copyright © CBC 2006. Reprinted by permission. Skillbuilder Handbook Page R15: Excerpts from “Crude Oil Prices Sink Below $66 a Barrel,” The Associated Press, September 11, 2006. Copyright © 2006 The Associated Press. All rights reserved. Reprinted by permission of Reprint Management Services. Page R21: Excerpt from “U.S. Trade Deﬁ cit Hit Record High in 2005”by Vikas Bajaj, The New York Times, February 10, 2006. Copyright © 2006 by The New York Times Co. Reprinted with permission. Page R23: Excerpt from “Not Business as Usual” by Elizabeth Bauman, Online NewsHour Extra, January 30, 2002. Copyright © 2002 MacNeil-Lehrer Productions. Reprinted by permission. Page R27: Excerpt from “1942: Beveridge Lays Welfare Foundations,” from BBC Web site. Copyright ©
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trademark of Time, Inc. TYCO is a trademark of Mattel, Inc. U.S. NEWS & WORLD REPORT design is a registered trademark of U.S. News & World Report, L.P. VAIO design is a registered trademark of Sony Kabushiki Kaisha TA Sony Corporation VISA design is a registered trademark of Visa International Service Association VOLVO is a registered trademark of Volvo Trademark Holding AB Corporation WWF design is a registered trademark of World Wide Fund for Nature All other trademarks are property of their respective owners and are in no way afﬁ liated with, connected to or sponsored by McDougal Littell, a division of Houghton Mifﬂ in Company. Trademarks, trade names, logos and graphics are shown in this book strictly for illustrative purposes. Acknowledgments R81t rates, adjusted for inflation, rise and fall to balance the amount saved with the amount borrowed, which affects the allocation of scarce resources between present and future uses. Related concepts: Interest Rate, Monetary Policy, Real vs. Nominal, Risk, Investing, Savers, Savings Standard 13 Role of Resources in Determining Income Income for most people is determined by the market value of the productive resources they sell. What workers earn depends, primarily, on the market value of what they produce and how productive they are. Related concepts: Human Resources, Derived Demand, Functional Distribution of Income, Labor, Labor Market, Marginal Resource Product, Personal Distribution of Income, Wage, Aggregate Demand (AD), Aggregate Supply (AS), Demand, Prices of Inputs, Functional Distribution Standard 14 Profit and the Entrepreneur Entrepreneurs are people who take the risks of organizing productive resources to make goods and services. Profit is an important incentive that leads entrepreneurs to accept the risks of business failure. Related concepts: Taxation, Costs, Costs of Production, Entrepreneur, Risk, Taxes, Cost/Benefit Analysis, Innovation, Entrepreneurship, Inventors Standard 15 Growth Investment in factories, machinery, new technology, and in the health, education, and training of people can raise future standards of living. Related concepts: Incentive, Interest Rate, Opportunity Cost, Production, Technological Changes, Trade-off, Tradeoffs among goals, Human Capital, Intensive Growth, Investment, Physical Capital, Productivity, Risk, Standard of Living, Economic Efficiency, Economic Equity, Economic Freedom, Economic Growth, Economic Security, Investing, Business, Businesses and Households, Factors
of Production, Health and Nutrition, Savers, Savings, Stock Market xx Peter Beck/Corbis Standard 16 Role of Government There is an economic role for government in a market economy whenever the benefits of a government policy outweigh its costs. Governments often provide for national defense, address environmental concerns, define and protect property rights, and attempt to make markets more competitive. Most government policies also redistribute income. Related concepts: Externalities, Income, Natural Monopoly, Role of Government, Taxation, Bonds, Income Tax, Maintaining Competition, Monopolies, Property Rights, Public Goods, Maintaining Regulation, Taxes, Regulation, Government Expenditures, Government Revenues Standard 17 Using Cost/Benefit Analysis to Evaluate Government Programs Costs of government policies sometimes exceed benefits. This may occur because of incentives facing voters, government officials, and government employees, because of actions by special interest groups that can impose costs on the general public, or because social goals other than economic efficiency are being pursued. Related concepts: Cost/Benefit Analysis, Benefit, Costs, Special Interest Group, Barriers to Trade Standard 18 Macroeconomy-Income/Employment, Prices A nation’s overall levels of income, employment, and prices are determined by the interaction of spending and production decisions made by all households, firms, government agencies, and others in the economy. Related concepts: Gross Domestic Product (GDP), Macroeconomic Indicators, Nominal Gross Domestic Product (GDP), Per Capita Gross Domestic Product (GDP), Potential Gross Domestic Product (GDP), Real Gross Domestic Product (GDP), Circular Flow Standard 19 Unemployment and Inflation Unemployment imposes costs on individuals and nations. Unexpected inflation imposes costs on many people and benefits some others because it arbitrarily redistributes purchasing power. Inflation can reduce the rate of growth of national living standards because individuals and organizations use resources to protect themselves against the uncertainty of future prices. Related concepts: Types of Unemployment, Causes of Inflation, Consumer Price Index (CPI), Deflation, Labor Force, Unemployment, Unemployment Rate, Inflation Standard 20 Monetary and Fiscal Policy Federal government budgetary policy and the Federal Reserve System’s monetary policy influence the overall levels of employment, output, and prices. Related concepts: Inflation, National Debt, Tools of the Federal Reserve, Discount Rate, Federal Budget, Fiscal Policy, Monetary Policy, Open Market Operations, Reserve Requirements, Budget, Budget Deficit, Central Banking System, Budget Surplus, Causes of Inflation UNIT 1 Fundamental Economic
Concepts CHAPTER 1 What Is Economics? CHAPTER 2 Economic Systems and Decision Making CHAPTER 3 Business Organizations Because of scarcity, societies have to make careful choices about how to use resources such as energy and land. 2 UNIT 1 Jim Wark/Lonely Planet Images Jim Wark/Lonely Planet Images CHAPTER 1 What Is Economics? Why It Matters Congratulations on being selected to head up the prom committee! Now you must decide on location, music, and refreshments. What factors do you need to consider when making your choices? In groups of four, determine your budget and identify possible locations, music providers, and food. Read Chapter 1 to learn how your prom selections, like all economic decisions, require you to make choices about how to best use limited resources. The BIG Idea Scarcity is the basic economic problem that requires people to make careful choices about how to use limited resources. Because of limited resources, consumers must make choices. 4 UNIT 1 Masterfile Economics: Principles and Practices Web site at glencoe.com and click on Chapter 1—Chapter Overviews to preview chapter information. Chapter Overview Visit the SECTION 1 Scarcity and the Science of Economics GUIDE TO READING Section Preview Academic Vocabulary In this section, you will learn why scarcity is the basic economic problem that faces every society and why scarcity requires us to make choices. Content Vocabulary • scarcity (p. 6) • economics (p. 6) • need (p. 6) • want (p. 6) • factors of production (p. 8) • land (p. 8) • capital (p. 8) • capital good (p. 8) • labor (p. 8) • entrepreneur (p. 9) • gross domestic product (GDP) (p. 9) • resource (p. 6) • comprehensive (p. 10) Reading Strategy Listing As you read the section, complete a graphic organizer like the one below by listing and describing the three economic choices every society must make. Economic Choices —moneycentral.msn.com PEOPLE IN THE NEWS Teens in the Red Like a lot of hard-working women, Andrea Alba has moments of financial despair. Between juggling three jobs, paying her bills and trying to get out of debt, she feels overwhelmed. “I just want to pay everything off,” she says. “I wish I didn’t have to struggle so much.” But Alba is no debt-weary baby boomer.
She’s only 19 and a couple of years out of high school. Her financial burdens may be heavier than other teens: She pays her own college tuition and also helps pay the rent and utilities at home. But the sinker was signing that first credit card application before she had even graduated from high school. “It was fine at first,” she says. “I used it mainly for gas. Then it just got deeper and deeper.” Within a year and a half of her 18th birthday, Alba was $2,500 in the hole. ■ You may wonder if the study of econom- ics is worth your time and effort. As you learned in the news story, though, many young people find out about economic issues the hard way. They discover, however, that a basic understanding of economics can help them make sense of the world they live in. The study of economics helps us in many ways, especially in our roles as individuals, as members of our communities, and as global citizens. The good news is that economics is not just useful. It can be interesting as well, so don’t be surprised to find that the time you spend on this topic will be well spent. Personal Finance Handbook See pages R10–R13 for more information on credit cards. Corbis CHAPTER 1 What Is Economics? 5 The Fundamental Economic Problem make a list of all the things we want, it would most likely include more things than we could ever hope to obtain. scarcity fundamental economic problem of meeting people’s virtually unlimited wants with scarce resources economics social science dealing with how people satisfy seemingly unlimited and competing wants with the careful use of scarce resources need basic requirement for survival, including food, clothing, and shelter want something we would like to have but is not necessary for survival MAIN Idea Societies do not have enough productive resources to satisfy everyone’s wants and needs. Economics & You Can you remember a time when you saved money to buy something expensive? Was the item a necessity or something that you simply wanted to own? Read on to find out how this relates to the core concepts of economics. Have you ever noticed that very few people are satisfied with the things they have? For example, someone without a home may want a small one; someone else with a small home may want a larger one; someone with a large home may want a mansion. Whether they are rich or poor, most people seem to want more than they already have. In fact, if each of us
were to Figure 1.1 Scarcity Unlimited Unlimited wants wants Limited Limited resources resources SCARCITY SCARCITY Choices WHAT to produce HOW to produce FOR WHOM to produce Scarcity is the fundamental economic problem that forces consumers and producers to use resources wisely. Economic Analysis Why is scarcity a universal problem? Scarcity The fundamental economic problem facing all societies is that of scarcity. Scarcity is the condition that results from society not having enough resources to produce all the things people would like to have. As Figure 1.1 shows, scarcity affects almost every decision we make. This is where economics comes in. Economics is the study of how people try to satisfy seemingly unlimited and competing wants through the careful use of relatively scarce resources. Needs and Wants Economists often talk about people’s needs and wants. A need is a basic requirement for survival, such as food, clothing, and shelter. A want is simply something we would like to have but is not necessary for survival. Food, for example, is needed for survival. Because many foods will satisfy the need for nourishment, the range of things represented by the term want is much broader than that represented by the term need. TINSTAAFL Because resources are limited, everything we do has a cost—even when it seems as if we are getting something “for free.” For example, do you really get a free meal when you use a “buy one, get one free” coupon? The business that gives it away still has to pay for the resources that went into the meal, so it usually tries to recover these costs by charging more for its other products. In the end, you may actually be the one who pays for the “free” lunch! Realistically, most things in life are not free, because someone has to pay for producing them in the first place. Economists use the term TINSTAAFL to describe this concept. In short, it means There Is No Such Thing As A Free Lunch. Reading Check Contrasting What is the difference between a need and a want? Three Basic Questions MAIN Idea Scarcity forces every society to answer the basic questions of WHAT, HOW, and FOR WHOM to produce. Economics & You When you write a report, you usually answer the who, what, when, where, and why questions. Read on to learn about the three basic questions in economics. Because we live in a world of relatively scarce resources, we have to make careful economic choices about the way we use these
resources. Figure 1.1 presents three basic questions we need to answer as we make these choices. WHAT to Produce The first question is WHAT to produce. For example, should a society direct most of its resources to the production of military equipment or to other items such as food, clothing, or housing? Suppose the decision is to produce housing. Should the limited resources be used to build low-income, middle-income, or upper-income housing? A society cannot have everything its people want, so it must decide WHAT to produce. HOW to Produce A second question is HOW to produce. Should factory owners use automated production methods that require more machines and fewer workers, or should they use fewer machines and more workers? If a community has many unemployed people, using more workers might be better. On the other hand, in countries where machinery is widely available, automation can often lower production costs. Lower costs make manufactured items less expensive and, therefore, available to more people. FOR WHOM to Produce The third question is FOR WHOM to produce. After a society decides WHAT and HOW to produce, it must decide who will receive the things produced. If a society decides to produce housing, for Corbis WHAT to Produce Societies need to decide whether to include parks in housing areas or to produce more housing. How do the three questions help societies make choices about scarce resources? example, should it be the kind of housing that is wanted by low-income workers, middle-income professional people, or the very rich? If there are not enough houses for everyone, a society has to make a choice about who will receive the existing supply. These questions concerning WHAT, HOW, and FOR WHOM to produce are never easy for any society to answer. Nevertheless, they must be answered as long as there are not enough resources to satisfy people’s seemingly unlimited wants and needs. Reading Check Analyzing Why are societies faced with the three basic questions of WHAT, HOW, and FOR WHOM? CHAPTER 1 What Is Economics? 7 factors of production productive resources that make up the four categories of land, capital, labor, and entrepreneurs land natural resources or other “gifts of nature” not created by human effort capital or capital goods tools, equipment, and factories used in the production of goods and services labor people with all their efforts, abilities and skills The Factors of Production MAIN Idea Four factors of production—land, capital, labor, and entrepreneurs—must be present to produce goods and services. Economics & You When
you were younger, did you ever sell something or have a paper route to make money? Read on to find out how this relates to the factors of production. People cannot satisfy all their wants and needs because productive resources are scarce. The factors of production, or resources required to produce the things we would like to have, are land, capital, labor, and entrepreneurs. As shown in Figure 1.2, all four are required to produce goods and services. Land In economics, land refers to the “gifts of nature,” or natural resources not created by people. “Land” includes deserts, fertile fields, forests, mineral deposits, livestock, sunshine, and the climate necessary to grow crops. Because a finite amount of natural resources are available at any given time, economists tend to think of land as being fixed, or in limited supply. Capital Another factor of production is capital, sometimes called capital goods—the tools, equipment, machinery, and factories used in the production of goods and services. Capital is unique because it is the result of production. A bulldozer, for example, is a capital good used in construction. When it was built in a factory, it was the result of production involving other capital goods. The computers in your school that are used to produce the service of education also are capital goods. Labor A third factor of production is labor— people with all their efforts, abilities, and skills. This category includes all people except a unique group of individuals called entrepreneurs, whom we single out because of their special role in the economy. Historically, factors such as birthrates, immigration, famine, war, and disease have had a dramatic impact on the quantity and quality of labor. Figure 1.2 The Factors of Production Land Capital Labor Entrepreneurs Land includes the “gifts of nature,” or natural resources not created by human effort. Capital includes the tools, equipment, and factories used in production. Labor includes people with all their efforts and abilities. Entrepreneurs are individuals who start a new business or bring a product to market. The four factors of production are necessary for production to take place. Economic Analysis What four factors of production are necessary to bring clothing to consumers? 8 UNIT 1 Fundamental Economic Concepts (l) Corbis, (cl) Neil Beer/Getty Images, (cr) Sie Productions/Zefa/Corbis, (r) Howard Grey/Getty Images &The Global Economy YOU Global Entrepreneurs Drive the Economy Every time you get paid for baby-sitting,
mowing the lawn, or being the deejay at an event, you have joined the “force”—the global entrepreneurial force, that is. A vast majority of the more than 20 million businesses in the United States are owned by entrepreneurs. Most either work alone or have a few employees. Until recently, the United States led in the percentage of adult entrepreneurs, with an estimated 11.3 percent of Americans starting a new business each year. Today, the small country of Jordan has just over half a million entrepreneurs, but it can boast the highest percentage of individuals attempting to go it alone. That’s nearly one in every five adults. The bar graph here illustrates the percentage of the adult population in select countries who are starting new businesses. 18.3% 13.5% 11.3% 8.9% Jordan Brazil United States Canada Israel United Kingdom Singapore South Africa Germany Japan 6.6% 6.3% 5.7% 5.4% 4.5% 1.5% Source: 2004 Global Entrepeneurship Monitor (GEM) www.gemconsortium.org entrepreneur risk-taking individual in search of profits gross domestic product (GDP) dollar value of all final goods, services, and structures produced within a country’s borders during a one-year period Skills Handbook See page R50 to learn about Using Bar Graphs. Entrepreneurs Some people are singled out because they are the innovators responsible for much of the change in our economy. Such an individual is an entrepreneur, a risktaker in search of profits who does something new with existing resources. Entrepreneurs are often thought of as being the driving force in an economy because they are the people who start new businesses or bring new products to market. Production Everything we make requires the four factors of production. The desks and lab equipment used in schools are capital goods. Teachers and other employees provide the labor. Land includes the property where the school is located as well as the iron ore and timber used to make the building. Finally, entrepreneurs are needed to organize the other three factors and make sure that everything gets done. Reading Check Interpreting What would happen if one of the factors of production was missing? The Scope of Economics MAIN Idea Economics analyzes how societies satisfy wants through careful use of relatively scarce resources. Economics & You So far, you have learned about the basics of economics. Read on to learn how economists help us make sense of this information. Economics is the study of human efforts to satisfy seemingly unlimited and
competing wants through the careful use of relatively scarce resources. Economics is also a social science because it deals with the behavior of people as they deal with this basic issue. The four key elements to this study are description, analysis, explanation, and prediction. Description One part of economics describes economic activity. For example, we often hear about gross domestic product (GDP)—the dollar value of all final goods, services, and structures produced within a country’s borders in a 12-month period. GDP is the CHAPTER 1 What Is Economics? 9 most comprehensive measure of a country’s total output and a key measure of a nation’s economic health. Economics also describes jobs, prices, trade, taxes, and government spending. Description allows us to know what the world looks like. However, description is only part of the picture, because it leaves many important “why” and “how” questions unanswered. Analysis Economics analyzes the economic activity that it describes. Why, for example, are the prices of some items higher than others? Why do some people earn higher incomes than others? How do taxes affect people’s desire to work and save? Analysis is important because it helps us discover why things work and how things happen. This, in turn, will help us deal with problems that we would like to solve. Explanation Economics also involves explanation. After economists analyze a problem and understand why and how things work, they need to communicate this knowledge to others. If we all have a common understanding of the way our economy works, some economic problems will be easier to address or even fix in the future. When it comes to GDP, you will soon discover that economists spend much of their time explaining why the measure is, or is not, performing in the manner that is expected. Prediction Finally, economics is concerned with prediction. For example, we may want to know whether our incomes will rise or fall in the near future. Because economics is the study of both what is happening and what tends to happen, it can help predict what may happen in the future, including the most likely effects of different actions. The study of economics helps us become more informed citizens and better decision makers. Because of this, it is important to realize that good economic choices are the responsibility of all citizens in a free and democratic society. Reading Check Explaining Why is economics considered to be a social science? SECTION 1 Review Vocabulary 1. Explain the significance of scarcity, economics, need, want, factors of
production, land, capital, capital good, labor, entrepreneur, and Gross Domestic Product (GDP). Main Ideas 2. Identifying What three basic questions must every society answer, and why? 3. Organizing Use a graphic organizer similar to the one below to identify and describe the factors of production. Critical Thinking 4. The BIG Idea How can studying economics help us make better choices about how to use scarce resources? 5. Synthesizing Information Do you pay to drink from the water fountains at school? Explain why the water is not really free by stating who actually pays for it. 6. Analyzing Visuals Look at Figure 1.2. Identify and categorize the factors of production for a business you know, such as your place of employment. What would happen if one of these factors was no longer available? Factor Land Description Applying Economics 7. Scarcity How does scarcity affect your life? Provide several examples of items you had to do without because of limited resources, and explain how you adjusted to this situation. 10 UNIT 1 Fundamental Economic Concepts NEWSCLIP Entrepreneurs are willing to take risks because they hope to reap great rewards. These rewards may come more quickly for some than for others. Kevin Plank, founder and CEO of Under Armour Inc., proves that it takes sweat to be a successful entrepreneur. Under Armour—No Sweat Eleven years ago, Kevin A. Plank was a walk-on football player at the University of Maryland who relished throwing his body at hulking opponents. But he hated how the cotton T-shirts under his uniform got sopping wet with sweat or rain. By then, cycling outfits and football undershorts were made with moisture-wicking synthetic fabrics. Plank, a starter during kickoffs and punts, wondered why not gridiron T-shirts, too? He tore the content label off a pair of his wick-away shorts, bought the same material from a fabric store, and gave a tailor $460 to sew seven shirts. “I set out to build a better football undershirt,” he says. Plank’s teammates loved the tees. So he drove to New York’s garment district, had hundreds more samples made, and dubbed his invention “Under Armour.” Now, at 33, Plank is the multimillionaire head of an athletic apparel powerhouse.... Yet it didn’t happen as fast as Plank originally expected. “At 23, I was probably
the smartest guy in the world,” he jokes.... “But I learned early on [that] this is not about one blast of exposure or one person wearing the product.” U NDER A RMOUR R EVENUE ) 300 250 200 150 100 50 0 2002 2003 2004 2005 Year Sources: Businessweek.com, www.123jump.com The McGraw-Hill Companies Operating at first out of his grandmother’s Georgetown house, Plank spent four years tirelessly pitching his product to college and NFL teams. “We convinced these big tough football players to start wearing tight-fitting synthetic shirts, which was completely new and different,” he says.... The pros’ acceptance brings Under Armour an authenticity that advertising alone can’t create.... That cachet also gives Plank license to charge $40 for a short-sleeve T-shirt. —Reprinted from BusinessWeek Examining the Newsclip 1. Identifying How did Kevin Plank get his idea for a new product? 2. Analyzing How does Plank exemplify the characteristics of an entrepreneur? CHAPTER 1 What Is Economics? 11 SECTION 2 Basic Economic Concepts GUIDE TO READING Section Preview Academic Vocabulary In this section, you will learn about some key economic terms and concepts. • transferable (p. 13) • accumulation (p. 14) • mechanism (p. 15) Content Vocabulary Reading Strategy • factor market (p. 15) • product market (p. 15) • economic growth (p. 16) • good (p. 13) • consumer good (p. 13) • durable good (p. 13) • nondurable good (p. 13) • productivity (p. 16) • service (p. 13) • value (p. 14) • paradox of value (p. 14) • utility (p. 14) • wealth (p. 14) • market (p. 15) • human capital (p. 16) • division of labor (p. 17) • specialization (p. 17) • economic interdependence (p. 17) Describing As you read the section, describe the factors that lead to economic growth. Economic Growth PRODUCTS IN THE NEWS Comic Books a Big Business — Asbury Park Press and the New York Times America may have started the worldwide comics craze when U.S. soldiers scattered them around in foreign countries during World War II. Today, they are a global phenomenon
—the most widely read literature in the world. According to one published report, 40 percent of all printed material in Japan consists of comics. In the United States, 375 new comic books are sold every month. The comic-book industry as a whole has had a healthy year. Industry analysts from the Comic Buyer’s Guide reported new comics sales of more than $149 million for the first half of 2005, up 6 percent from the period a year earlier. Marvel Entertainment, a publicly traded company that filed for bankruptcy protection in December 1996 and reorganized in July 1998, has recovered strongly in recent years, largely on the strength of its success with movies based on X-Men and Spider-Man. ■ When you hear the word economics, you probably think of “big business”—large corporations that run banks and petroleum refineries, or companies that make automobiles, computers and, yes, even comic books. Economics does include big business, but it also includes much more. Like other social sciences, economics has its own vocabulary and uses terms such as recession, commodity, or utility. To understand economics, a review of key terms is necessary. Fortunately, most economic terms are widely used, and you will already be familiar with many of them. 12 UNIT 1 Fundamental Economic Concepts The McGraw-Hill Companies Goods, Services, and Consumers MAIN Idea Economic products are goods or services that are useful, relatively scarce, and transferable. Economics & You Every time you buy something in a store, you act as a consumer. Read on to learn more about this and other basic economic vocabulary. Economics is concerned with economic products—goods and services that are useful, relatively scarce, and transferable to others. Economic products help us satisfy our wants and needs. Because they are both scarce and useful, they command a price. Goods There are different types of economic products. The first one is a good—a useful, tangible item, such as a book, car, or compact disc player, that satisfies a want. When manufactured goods are used to produce other goods and services, they are called capital goods. An example of a capital good would be a robot welder in a factory, an oven in a bakery, or a computer in a high school. Goods intended for final use by individuals are consumer goods. Any good that lasts three years or more when used on a regular basis is called a durable good. Durable goods include both capital goods, such as robot welders, and consumer goods, such as automobiles. A
nondurable good is an item that lasts for fewer than three years when used on a regular basis. Food, writing paper, and most clothing items are examples of nondurable goods. Services The other type of economic product is a service, or work that is performed for someone. Services include haircuts, home repairs, and forms of entertainment such as concerts. They also include the work that doctors, lawyers, and teachers perform. The difference between a good and a service is that a good is tangible, or something that can be touched, while a service is not. Consumers Consumers are the people who use goods and services to satisfy their wants and needs. As consumers, people indulge in consumption, the process of using up goods and services in order to satisfy wants and needs. Reading Check Interpreting How are goods, services, and consumers related? good tangible economic product that is useful, relatively scarce, and transferable to others consumer good good intended for final use by consumers rather than businesses durable good a good that lasts for at least three years when used regularly nondurable good a good that wears out or lasts for fewer than three years when used regularly service work or labor performed for someone Consumer Goods These students are using computers in their school computer lab. Would you consider computers as durable goods or nondurable goods, and why? 13 value monetary worth of a good or service as determined by the market paradox of value apparent contradiction between the high monetary value of a nonessential item and the low value of an essential item utility ability or capacity of a good or service to be useful and give satisfaction to someone wealth sum of tangible economic goods that are scarce, useful, and transferable from one person to another Value, Utility, and Wealth MAIN Idea The value of a good or service depends on its scarcity and utility. Economics & You Has anyone ever thought you paid too much for something? Read on to learn how the value of an item is determined. In economics, value refers to a worth that can be expressed in dollars and cents. Why, then, does something have value, and why are some things more valuable than others? To answer these questions, it helps to review a problem Adam Smith, a Scottish social philosopher, faced back in 1776. The Paradox of Value Adam Smith was one of the first people to describe how markets work. He observed that some necessities, such as water, had a very low monetary value. On the other hand, some nonnecessities, such as diamonds, had a very high value. Smith called this contradiction the paradox
of value. Economists knew that scarcity was necessary for something to have value. Still, scarcity by itself could not fully explain how value is determined. Utility It turned out that for something to have value, it must also have utility, or the capacity to be useful and provide satisfaction. Utility is not something that is fixed or even measurable, like weight or height. Instead, the utility of a good or service may vary from one person to the next. One person may get a great deal of satisfaction Value Economists aren’t the only ones obsessed with value. Do a simple Google search of “value,” and you’ll get nearly 2 million hits. You’ll get approximately a quarter million if you search for “measure of value,” and nearly 140,000 if you search for “measuring value.” Maybe that’s why economists simply define value as “a worth that can be expressed in dollars and cents.” 14 UNIT 1 Fundamental Economic Concepts from a home computer; another may get very little. One person may enjoy a rock concert; another may not. Value For something to have monetary value, economists decided, it must be scarce and have utility. This is the solution to the paradox of value. Diamonds are scarce and have utility, thus they possess a value that can be stated in monetary terms. Water has utility but is not scarce enough in most places to give it much value. Therefore, water is less expensive, or has less monetary value, than diamonds. The emphasis on monetary value is important to economists. Unlike moral or social value, which is the topic of other social sciences, the value of something in terms of dollars and cents is a concept that everyone can easily understand. Wealth In an economic sense, the accumulation of products that are tangible, scarce, useful, and transferable from one person to another is wealth. A nation’s wealth is comprised of all tangible items—including natural resources, factories, stores, houses, motels, theaters, furniture, clothing, books, highways, video games, and even basketballs— that can be exchanged. While goods are counted as wealth, services are not, because they are intangible. However, this does not mean that services are not useful or valuable. Indeed, when Adam Smith published his famous book The Wealth of Nations in 1776, he was referring specifically to the abilities and skills of a nation’s people as the source of its wealth. For Smith, if
a country’s material possessions were taken away, its people, through their efforts and skills, could restore these possessions. On the other hand, if a country’s people were taken away, its wealth would deteriorate. Reading Check Summarizing How are value and utility related? market meeting place or mechanism that allows buyers and sellers to come together factor market market where the factors of production are bought and sold product market market where goods and services are bought and sold The Circular Flow of Economic Activity MAIN Idea The economic activity in markets connects individuals and businesses. Economics & You When you receive a paycheck, do you understand how you fit in the larger economy? Read on to learn about the flow of economic activity. The wealth that an economy generates is made possible by the circular flow of economic activity. The key feature of this circular flow is the market, a location or other mechanism that allows buyers and sellers to exchange a specific product. Markets may be local, national, or global—and they can even exist in cyberspace. Factor Markets As shown in Figure 1.3, individuals earn their incomes in factor markets, where the factors of production are bought and sold. This is where entrepreneurs hire labor for wages and salaries, acquire land in return for rent, and borrow money. The concept of a factor market is a simplified but realistic version of the real world. For example, you participate in the factor market when you work and sell your labor to an employer. Product Markets After individuals receive their income from the resources they sell in a factor market, they spend it in product markets. These are markets where producers sell their goods and services. Thus, the wages and salaries that individuals receive from businesses in the factor markets returns to in the product markets. businesses Businesses then use this money to produce more goods and services, and the cycle of economic activity repeats itself. Reading Check Explaining What roles do factor markets and product markets play in the economy? Figure 1.3 The Circular Flow of Economic Activity See StudentWorks™ Plus or glencoe.com. Product Markets Business income $ Businesses Goods Services Buy productive resources $ Payments for resources Factor Markets Goods Services Land Capital Labor Entrepreneurs Consumer spending $ Individuals $ Income from resources The circular flow diagram shows the high degree of economic interdependence in our economy. In the diagram, the factors of production and the products made from them flow in one direction. The money consumers spend on goods and services flows in the opposite direction. Economic Analysis As a consumer, what role do you play
in the circular flow of economic activity? CHAPTER 1 What Is Economics? 15 economic growth increase in a nation’s total output of goods and services over time productivity measure of the amount of output produced with a given amount of productive factors human capital sum of people’s skills, abilities, health, knowledge and motivation Personal Finance Handbook See pages R16–R19 for more information on education. Productivity and Economic Growth MAIN Idea A nation’s economic growth is due to several factors. Economics & You Have you decided yet what you will do after graduating from high school? Read on to learn how investing in more education now can give you a higher lifetime income. Economic growth occurs when a nation’s total output of goods and services increases over time. This means that the circular flow becomes larger, with more factors of production, goods, and services flowing in one direction and more payments in the opposite direction. Productivity is the most important factor contributing to economic growth. Productivity Everyone in a society benefits when scarce resources are used efficiently. This is described by the term productivity, a measure of the amount of goods and services produced with a given amount of resources in a specific period of time. Productivity goes up whenever more can be produced with the same amount of resources. For example, if a company produced 5,000 pencils in an hour, and it produced 5,100 in the next hour with the same amount of labor and capital, productivity went up. Productivity is often discussed in terms of labor, but it applies to all factors of production. Investing in Human Capital A major contribution to productivity comes from investments in human capital, the sum of people’s skills, abilities, health, knowledge, and motivation. Government can invest in human capital by providing education and health care. Businesses can invest in training and other programs that improve the skills of their workers. Individuals can invest in their own education by completing high school, going to technical school, or attending college. Figure 1.4 shows that investments in education can have substantial payoffs. According to the table, high school graduates earn substantially more than nongraduates, and college graduates make even more than Figure 1.4 Effect of Education on Income Education Less than 9th grade 9th to 12th grade (no diploma) High school graduate or equivalent Some college, no degree Associate degree Bachelor’s degree Master’s degree Professional degree Doctorate degree Average income Males $19,746 $23,747 $34,700
$43,531 $45,800 $65,523 $83,189 $126,728 $103,939 Females $11,492 $13,343 $20,325 $25,111 $29,031 $37,373 $48,945 $63,322 $67,676 Source: U.S. Department of Commerce, Bureau of the Census, 2006 Education is one way to invest in human capital. Economic Analysis How does this type of investment pay off for both employers and their employees? 16 UNIT 1 Fundamental Economic Concepts Digital Vision/Getty Images high school graduates. Educational investments require that we make a sacrifice today so we can have a better life in the future, and few investments generate higher returns. Division of Labor and Specialization Division of labor and specialization can improve productivity. Division of labor is a way of organizing work so that each individual worker completes a separate part of the work. In most cases, a worker who performs a few tasks many times a day is likely to be more proficient than a worker who performs hundreds of different tasks in the same period. Specialization takes place when factors of production perform only tasks they can do better or more efficiently than others. The division of labor makes specialization possible. For example, the assembly of a product may be broken down into a number of separate tasks (the division of labor). Then each worker can perform the specific task he or she does best (specialization). One example of the advantages offered by the division of labor and specialization is Henry Ford’s use of the assembly line in automobile manufacturing. Having each worker add one part to the car, rather than a few workers assembling the entire vehicle, cut the assembly time of a car from a day and a half to just over 90 minutes—and reduced the price of a new car by more than 50 percent. Economic Interdependence The U.S. economy has a remarkable degree of economic interdependence. This means that we rely on others, and others rely on us, to provide most of the goods and services we consume. As a result, events in one part of the world often have a dramatic impact elsewhere. This does not mean that interdepen dence is necessarily bad. The gains in productivity and income that result from specialization almost always offset the costs associated with the loss of self-sufficiency. Reading Check Analyzing What role does specialization play in the productivity of an economy? division of labor division of work into a number of separate tasks to be performed by different
workers specialization assignment of tasks to the workers, factories, regions, or nations that can perform them more efficiently economic interdependence mutual dependency of one person’s, firm’s, or region’s economic activities on another’s Skills Handbook See page R40 to learn about Analyzing Information. SECTION 2 Review Vocabulary 1. Explain the significance of good, consumer good, durable good, nondurable good, service, value, paradox of value, utility, wealth, market, factor market, product market, economic growth, productivity, human capital, division of labor, specialization, and economic interdependence. Main Ideas 2. Explaining How do goods and services differ? 3. Organizing Use a graphic organizer similar to the one below to describe the different transactions that take place in product markets. Produc t Market 4. Describing How is economic growth related to productivity? Critical Thinking 5. The BIG Idea How is value related to scarcity and utility? 6. Drawing Conclusions Why is investing in human capital beneficial? 7. Analyzing Visuals Look at Figure 1.3. How can individu- als increase the flow of circular activity? What effect would this increase have on the other parts of the economy? 8. Inferring How might major events such as labor strikes affect you and your community? Select a possible event and write a brief paragraph about the potential effects. Applying Economics 9. Specialization Provide at least three examples each of specialized workers and specialized capital that are used in your school to provide the service of education. How would productivity change if they were not available to your school? CHAPTER 1 What Is Economics? 17 Profiles in Economics ECONOMIST Adam Smith (1723–1790) • introduced the idea that the division of labor led to the great prosperity of Britain • defined the wealth of a nation as the sum of the goods produced by its people Division of Labor Adam Smith did not set out to become an economist. In fact, he focused on philosophy when, at age 14, he earned a scholarship to attend Glasgow University. Travels throughout Europe and talks with notable thinkers helped Smith turn his attention to economics. In 1776 he published his most influential book, An Inquiry into the Nature and Causes of the Wealth of Nations, in which he observed that labor becomes more productive as each worker becomes more skilled at a single job. This made him the first to introduce and recognize the importance of the “division of labor.” Invisible Hand Smith’s most
important contribution was the notion that competition and individual self-interest would somehow act as an “invisible hand” to guide resources to their most productive uses. He suggested that the role of government should be limited to enforcing contracts, granting patents and copyrights to encourage inventions and new ideas, and providing public works, such as roads and bridges. Wealth of Nations Smith also put forth the new idea that the “wealth of nations” should be defined as the sum of the goods produced by labor, not the personal financial wealth of those who owned them. Competition in markets, along with the division of labor and the invisible hand, would lead to increased productivity and output. Smith’s doctrine of laissez-faire (French for “let it be”) marked the beginning of modern economic thought, and it still serves as the basis of our free market economy. Examining the Profile 1. Summarizing Ideas What ideas did Adam Smith contribute to economic thought? 2. Synthesizing Explain how Smith’s ideas are evident in the workings of the American economy. Adam Smith studied to become a philosopher. Yet today he is best known for his support of a free market economy. 18 UNIT 1 Fundamental Economic Concepts Bettmann/Corbis SECTION 3 Economic Choices and Decision Making GUIDE TO READING Section Preview In this section, you will learn that you face trade-offs and opportunity costs whenever you make an economic decision. Content Vocabulary • trade-off (p. 20) • opportunity cost (p. 20) • production possibilities frontier (p. 21) • economic model (p. 23) • cost-benefit analysis (p. 24) • free enterprise economy (p. 24) • standard of living (p. 24) Academic Vocabulary • alternative (p. 20) • assumption (p. 23) Reading Strategy Identifying As you read this section, complete a graphic organizer similar to the one below by identifying the ways in which you can make economic choices and what these strategies allow you to learn. Problems Trade-offs Strategy Purpose Decision-making grid —BusinessWeek PEOPLE IN THE NEWS The Grease Pits of Academia Students at Belmont Abbey College may have a head start in the race for post-graduation jobs—at least jobs that go VROOM! Starting this fall, the 1,000-student school outside Charlotte, N.C., will offer the nation’s first four-year bachelor’s degree in Motorsports Management. Students

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